Accounting Dissertation Addresses Corporate Political Spending Disclosures

Jordan Bable, PhD, Katz, Accounting, Political Spending
Monday, May 15, 2017

Shortly after earning his master’s degree in accounting, Jordan Bable quickly realized that life as an auditor was not for him. “A few of my professors encouraged me to look at PhD programs, and I opted to work. After a few months on the job, I knew that I wanted to pursue my PhD,” Bable, who was living in Pittsburgh at the time, recalls.

He evaluated several programs, and after visiting the University of Pittsburgh Joseph M. Katz Graduate School of Business and meeting with Vicky Hoffman, Professor of Business Administration and James H. Rossell Endowed Faculty Fellow, he knew Katz was the right place for him. 

“I think Vicky was skeptical at first, but after an hour, we had a great rapport and she took me to the faculty lunchroom to introduce me to some of the Katz accounting faculty,” says Bable.

Managerial and financial accounting are Bable’s areas of research, and his dissertation explores how investors react to corporate political spending disclosure. “There is no legal requirement for U.S. corporations to disclose certain types of political spending,” Bable says. “I’m looking at how individual investors react when a company discloses its political spending and if that disclosure affects how they value the firm."

Don Moser, Katz Professor of Business Administration and Dean’s Excellence Faculty Fellow, serves as chair of his dissertation committee.

Bable developed an experiment to test his hypothesis, recruiting participants via Amazon’s Mechanical Turk platform. He created a company that operated a hypothetical grocery store chain. Participants were provided background information about the firm, its income statement, and a note disclosing its political spending. Participants were then asked to rate the attractiveness of the company as an investment and decide how much of a portfolio they would invest in the company.

Bable found that individual investors whose political identities are not aligned with the political spending of a company will value that company lower than investors whose political identities align with the company’s political spending. He found that investors appear to use political spending disclosures consciously in their assessments because the pattern occurred both between participants and within participants.

“My findings indicate that individual investors may benefit if corporate political spending disclosures were mandatory,” Bable says. “They are consciously using the information to make their decisions, which suggests that they believe the disclosure is relevant.”

Last spring, Bable was awarded the prestigious Deloitte Foundation Doctoral Fellowship. He was one of 10 PhD candidates in the United States to receive the $25,000 fellowship. Deloitte fellowships are awarded to students who plan to pursue academic careers upon graduation. 

As Bable prepares to graduate, he will remember Katz as a place that values research and collegiality. “The accounting group is very supportive of one and another, and Katz has been a great place for me to explore my intellectual curiosity.”

Bable has accepted a faculty position at the University of Waterloo in Canada.