Abstract
Ethnic tension in the United States became more salient after Donald Trump’s election on November 9, 2016. Exploring the variation in management forecasts, we show that after the Trump election, minority CEOs exhibit more pessimism in their earnings forecasts (underestimation of the mean of earnings), compared with their non-minority counterparts. This tendency toward pessimism is observed across CEOs from various minority groups and is particularly pronounced in firms led by less experienced or less confident minority CEOs. Further analyses reveal that minority CEOs make less specific and less precise forecasts. Minority CEO pessimism is not explained by alternative explanations including terrorist attacks and minority CEOs’ political ideology. Collectively, our research provides evidence that the Trump election induces biased beliefs in the form of pessimism in ethnic minority CEOs. © The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature 2024.
| Original language | English |
|---|---|
| Pages (from-to) | 950-993 |
| Journal | Review of Accounting Studies |
| Volume | 30 |
| Issue number | 1 |
| Online published | 1 Jul 2024 |
| DOIs | |
| Publication status | Published - Mar 2025 |
Bibliographical note
Full text of this publication does not contain sufficient affiliation information. With consent from the author(s) concerned, the Research Unit(s) information for this record is based on the existing academic department affiliation of the author(s).Research Keywords
- CEO pessimism
- Ethnic threat
- Management forecast
- Trump election