In this study, we examine how the personal ideology of chief executive officers (CEOs), as proxied by their political preferences, influences their insider-trading choices. We expect and find that, relative to Democratic-leaning CEOs, the conservative ideology of Republican-leaning CEOs leads them to refrain more from informed insider trading to avoid costly litigation. Using an exogenous change in litigation environment, we find that Republican CEOs increase informed trading when facing a sudden relaxation of litigation risk, suggesting that the fear of litigation cost is the underlying mechanism of the observed relation. Our findings are robust to different model specifications.

中文翻译：

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管理政治取向与内幕交易

在这项研究中，我们研究了首席执行官 (CEO) 的个人意识形态，以他们的政治偏好为代表，如何影响他们的内幕交易选择。我们预计并发现，相对于倾向民主党的 CEO，倾向共和党的 CEO 的保守意识形态导致他们更多地避免知情的内幕交易，以避免代价高昂的诉讼。利用诉讼环境的外生变化，我们发现共和党 CEO 在面临诉讼风险突然放松时会增加知情交易，这表明对诉讼成本的恐惧是观察到的关系的潜在机制。我们的研究结果对不同的模型规格是稳健的。