Judge Ideology and Corporate Sexual Orientation Equality

Abstract

We investigate the role that judge ideology plays in determining corporate sexual orientation equality (CSOE) initiatives. We find a negative relationship between liberal judge ideology and CSOE initiatives. This is consistent with the agency perspective. Further analysis suggests that this association is intensified for firms led by powerful chief executive officers (CEOs) and those that possess higher corporate social responsibility (CSR) ratings. Finally, we show that firms in liberal jurisdictions that invest more in CSOE initiatives pay higher premium while raising external capital. Our results are robust for an array of sensitivity and identification tests.