Abstract
How do investors react to firms “picking sides” along ideological fault lines? Integrating strategic differentiation logic with work on ideological polarization, we argue that some investors will react positively to information that a firm supports a contested social issue and some to information that a firm opposes it. We conduct a financial event study of the Corporate Equality Index (2002-2018), which ranks the largest U.S. firms on LGBTQ policies and practices – naming the “best performers” and the “worst offenders”. We find that on the day the index is released, these companies experience a positive cumulative abnormal return, whereas the companies ranked in the middle do not. Our findings speak to the emerging literature in strategy on the relationship between societal values and financial valuation.
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.
