CEO personality and ideological corporate political activity: is there a connection?

Scholars have called for additional research into the antecedents to corporate political activity (CPA), including why firms may engage in specific kinds of CPA. In response, in what we believe to be a first-of-its-kind study, we rely on upper echelons theory to explore the relationship between CEO personality and the kind of CPA in which a firm engages. In particular, we argue that certain traits will be related to ideological CPA (iCPA) that is less beneficial to the firm but which will appeal to CEOs with those traits. We also propose that managerial discretion will moderate the relationship between CEO personality and this form of opportunistic CPA. We test our hypotheses using a unique database combined with a variety of archival sources, resulting in a sample of 329 publicly traded firms from the S&P 500 for which we had complete records that engaged in CPA 63,142 times over a ten-year period (2011-2020). We find that CEO agreeableness, conscientiousness, and neuroticism will be negatively related to iCPA, while CEO openness will be positively associated with it. We further find that managerial discretion moderates the relationship of CEO extraversion and openness with iCPA, however in opposite directions. Finally, we discuss theoretical and managerial implications and propose directions for future research.