The Political Economy of Firm Networks: CEO Ideology and Global Trade

Département: Finance

Intervenant: Margarita Tsoutsoura (Washington University)

Salle: TBD

Abstract

We examine how the political ideology of corporate leaders shapes cross-border firm networks. Exploiting changes in ideological alignment between U.S. firm CEOs and foreign governments around close foreign elections, we show that U.S. firms are more likely to terminate trade relationships with countries led by governments whose ideology becomes more distant from that of their CEOs. The impact is concen[1]trated among CEOs holding strong political views, and is particularly pronounced for shorter trade relationships, suggesting ideological alignment is more relevant in more flexible and substitutable connections. Our findings highlight the role of ideol[1]ogy in shaping the formation and persistence of international firm networks.