Publication Type
Journal Article
Version
acceptedVersion
Publication Date
11-2021
Abstract
Business decisions made by the real estate industry have a profound effect on the well-being of people who live, work, or shop in these buildings. While these decisions may be informed by evidence, the available evidence is often incomplete or imperfect. Therefore, the personal opinions or judgments of senior executives can have an effect. In this paper, we study these effects in two parts: risk-taking and environmental, social, and governance (ESG) activities. Since a person’s political learning is a relatively stable measure, and is associated with preferences for risk and ESG activities, we examine how the political leanings of the CEOs are related to these effects. Using the data from 2003 to 2016, we find that real estate investment trusts with Democratic-leaning CEOs tend to take more risks, as evidenced by higher levels of leverage and more risk in stock prices. We further find that Democratic-leaning CEOs are more broadly engaged in environmentally oriented ESG activities.
Keywords
Politics, environmental, social and governance activities, corporate social responsibility, risk taking, decision making
Discipline
Real Estate | Strategic Management Policy
Publication
Journal of Real Estate Research
Volume
43
Issue
4
First Page
419
Last Page
446
ISSN
0896-5803
Identifier
10.1080/08965803.2021.2003507
Publisher
Taylor and Francis Group
Citation
DENG, Xiaoying; ANGLIN, Paul M.; GAO, Yanmin; and SUN, Hua.
How do the CEO political leanings affect REIT business decisions?. (2021). Journal of Real Estate Research. 43, (4), 419-446.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/7615
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1080/08965803.2021.2003507