The ideological recipe: CEO politics as the secret ingredient in boosting restaurant market value through promotions

Abstract

Based on upper echelons theory, the objective of this article is to analyze the influence of CEO political ideology on the effect of promotional activities on the market value of restaurants. Using a sample of 1061 promotional activities conducted by major U.S. restaurants between 1990 and 2022, the empirical application shows that not only do restaurants’ promotional activities result in an increase in their market value—contrary to the negative effects found in the literature—but those restaurants led by liberal CEOs (versus conservative CEOs) experience a greater increment in said market value. These results and the relationships among CEO's political ideology, promotional actions, and market value bring about several theoretical implications, integrating theories from political psychology into financial market theories.