A new study has found that, for companies run by Republican CEOs, five years after an acquisition, the average cumulative return on the stock of the acquiring company was 11.27 percent. Companies run by non-Republicans saw an average return of negative 9.46 percent.
“I’m not saying Republican managers are better,” said Ahmed Elnahas, assistant professor of finance at Eastern Kentucky University and the study’s lead author, “but it’s probably because they’re more conservative in making financial decisions.”
Republican CEOs also tend to more often acquire public companies within their own industry and pay with cash.
The study looked at roughly 2,100 CEOs, and their political affiliation was classified by looking at their personal political contributions between 1993 and 2006. CEOs were identified as Republicans if they only donated to Republican politicians and all other CEOs were called non-Republicans.
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