with Elisabeth Kempf and Mancy Luo
Abstract: We study how the political ideology of corporate leaders shapes international trade. Exploiting changes in ideological alignment between U.S. CEOs and foreign governments around national elections, we show that firms reduce imports from countries whose governments become more ideologically distant from their CEOs, relative to firms whose CEOs become more aligned. These firms do not significantly reduce their total imports; instead, they reallocate toward origin countries that are ideologically closer and more expensive to source from. Textual analysis of earnings call transcripts suggests that an important mechanism is a change in CEOs' perceptions of foreign macroeconomic conditions.