Abstract
In two analyses, this paper evaluates whether investors incentivize corporate activism. Exploiting an event study of large firms' stock prices, the first analysis finds no evidence of abnormal returns following corporate activism on LGBT rights and immigration, indicating that investors do not believe that activism helps or hurts a company's value. However, the second analysis finds modest evidence that corporations that receive higher returns after engaging in activism are more likely to engage in activism again in the future. These results suggest that while the average corporation does not appear to face a stock market incentive to engage in social activism, corporations that perceive that they do are more likely to continue their social advocacy. In a profound interaction of economics with cultural politics, businesses' positions on social issues can be explained by the perceived preferences of their shareholders.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
