This study investigates whether and how the CEOs’ political spending choice is associated with their earnings management behavior. Using a sample of 8,502 firm-year observations from S&P 500 firms during 1993–2012 over 10 election cycles, we provide empirical evidence that CEOs making political spending mainly through the corporate channel to recipients advised by the firms’ own political action committees engage in less earnings management than those making political spending mainly through the private channel to their own selected recipients. This finding suggests that CEOs’ political spending choice of the private channel over the corporate channel represents their strong self-interests and is associated with higher agency costs. We further show that the distinction between the two channels is less important when the CEOs’ private political spending patterns are aligned with those of their own firms. Our results are robust to techniques alleviating the potential endogeneity issue related to political spending behavior.

中文翻译：

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管理性政治支出选择和盈余管理

本研究调查了 CEO 的政治支出选择是否以及如何与他们的盈余管理行为相关联。使用标准普尔 500 指数公司在 1993-2012 年 10 个选举周期内的 8,502 个公司年度观察样本，我们提供了经验证据，表明主要通过公司渠道向公司自己的政治行动委员会建议的接受者进行政治支出的 CEO 参与较少盈余管理比那些主要通过私人渠道向自己选定的受助人进行政治支出。这一发现表明，CEO 选择私人渠道而不是公司渠道的政治支出代表了他们强烈的自身利益，并且与更高的代理成本相关。我们进一步表明，当 CEO 的私人政治支出模式与他们自己公司的模式一致时，这两种渠道之间的区别就不那么重要了。我们的结果对于缓解与政治支出行为相关的潜在内生性问题的技术是稳健的。