Institutional Investors’ Political Leanings and Management Earnings Forecasts

Institutional Investors’ Political Leanings and Management Earnings Forecasts | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Institutional Investors’ Political Leanings and Management Earnings Forecasts Xin Cheng, Wei Liu, Yinan Yang, Cheng Yin This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-7635624/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract This study investigates the impact of institutional investors’ political leanings on managers’ decisions to provide earnings forecasts. Using a large sample from 2000 to 2018, we find that firms with Republican-leaning institutional investors issue more management earnings forecasts. This association is more pronounced for firms with weaker CEO power and stronger investor influence. Our results are robust to tests addressing endogeneity concerns and alternative measures for institutional investors’ political leanings. Additional analyses show that managers in these firms also issue earnings forecasts of higher quality and longer horizons. Furthermore, we find that the positive effect of investors’ Republican leanings on the frequency of management earnings forecasts is only valid for quasi-indexers and transient institutional investors who rely more on public information. Overall, this paper sheds light on how institutional investors’ political preferences influence firms’ management earnings forecasts and provides a political view to understand managers’ disclosure decisions. Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-7635624","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":531310260,"identity":"24fbb309-c248-4e72-a331-46dbddf08ef2","order_by":0,"name":"Xin Cheng","email":"","orcid":"","institution":"Renmin University of China","correspondingAuthor":false,"prefix":"","firstName":"Xin","middleName":"","lastName":"Cheng","suffix":""},{"id":531310262,"identity":"fa668420-2dcb-44dc-9aa9-10c8277fb176","order_by":1,"name":"Wei Liu","email":"","orcid":"","institution":"Beijing Jiaotong 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Using a large sample from 2000 to 2018, we find that firms with Republican-leaning institutional investors issue more management earnings forecasts. This association is more pronounced for firms with weaker CEO power and stronger investor influence. Our results are robust to tests addressing endogeneity concerns and alternative measures for institutional investors\u0026rsquo; political leanings. Additional analyses show that managers in these firms also issue earnings forecasts of higher quality and longer horizons. Furthermore, we find that the positive effect of investors\u0026rsquo; Republican leanings on the frequency of management earnings forecasts is only valid for quasi-indexers and transient institutional investors who rely more on public information. 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