Political Polarization Now Puts Stock Prices at Risk

Public company executives should model political conflict as a cost and valuation risk, not only a reputational one.

Updated on Nov. 3, 2026 in Public Companies

Political Polarization Now Puts Stock Prices at Risk

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Florida State University professor Michael Holmes co-authored research in Strategic Management Review, published in June, arguing that rising political polarization is weighing on corporate profitability and stock prices. For U.S. businesses, the study frames political conflict as a managerial risk, not just a public-affairs issue.

Why it matters

The authors argue that many Americans have grown disillusioned with the social contract, producing despair, jealousy and anger across the political spectrum. They also contend that U.S. political parties use that voter anger to drive fundraising, which makes companies that take public positions more exposed to backlash from one side or the other.

The research cites Disney's 2022 walkouts over Florida's HB 1557 as a leading example of political conflict affecting a major public company. The authors project the opposing party could hold power within two to four years, a window they argue managers should plan around.

The players

Florida State University

A public research university in Tallahassee, Florida, whose business faculty produce academic research on management and strategy.

Michael Holmes

FSU Herbert Wertheim Distinguished Professor of Business Administration who co-authored the research on political polarization and business.

Jackson Nickerson

Saint Louis University academic who co-authored the research with Holmes and the 2024 Conversation piece on the American dream.

The Walt Disney Company

A large entertainment and theme-park conglomerate with major investments in Florida, whose 2022 handling of HB 1557 became a case study in political risk.

The details

Businesses are often major political donors, and companies may give to obtain or keep a government contract without any guarantee of the outcome they want. The research argues that when a company takes or avoids a political stance, it can trigger employee walkouts, customer backlash and government retaliation. In Disney's case, the Florida government revoked the company's privileged tax and regulatory status after its CEO publicly opposed the bill.

2022: Disney employees walked out after the company did not take a stance on Florida's HB 1557, and the CEO was ousted later that year.
2024: Holmes and co-author Jackson Nickerson argued in The Conversation that many Americans believe the American dream is out of reach.
June 2026: Strategic Management Review published the research article.
November 3, 2026: Holmes commented ahead of Tuesday's elections.

Market Landscape

The study places Disney's 2022 controversy alongside recent conflicts involving Anheuser-Busch and Target as examples of companies pulled into political disputes. It frames these cases as evidence that polarization now affects profitability and stock prices, not only corporate reputation.

Operators should treat public political positions as a risk to model, weighing how employee, customer and government reactions could affect costs and access to contracts. Management teams should set a written policy for when the company will and will not comment on legislation that affects its operations.

The takeaway

Political exposure belongs in strategic planning, not only in public-affairs communications. Businesses should brief their boards on how a shift in state or federal power could change their tax, regulatory and contracting position, and consult qualified counsel before taking public positions on contested legislation.