CEO political leanings affect their international deals

Conservative CEOs are four times more likely than their liberal counterparts to acquire international firms rather than forge new alliances when entering foreign markets, according to new research from Associate Professor Aaron Hill. The same study finds that these political biases can be moderated by active, independent boards.

“In the past, the expectation has been that conservative people tend to be conservative with their money, they tend to shun risk, whereas liberal people tend to be less risk averse,” Hill said. “What we found is that in the context of international expansion, our expectation of risk aversion essentially reverses. We find that more conservative CEOs are associated with more risk-seeking strategies, such as acquisitions.”

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