Download this Paper Open PDF in Browser

Do LGBT-supportive Corporate Policies Enhance Firm Performance?

Human Resource Management, Forthcoming

44 Pages Posted: 21 Apr 2013 Last revised: 7 Aug 2016

Shaun Pichler

California State University, Fullerton

Janell L. Blazovich

University of St. Thomas

Kirsten A. Cook

Texas Tech University - Area of Accounting

Janet McDonald Huston

University of South Florida

William Robert Strawser

University of Colorado Denver

Date Written: August 1, 2016

Abstract

Prior research provides evidence that LGBT-supportive corporate policies are related to important human resources functions, such as enhanced recruitment and retention. In addition, prior research indicates that investors view the adoption of such policies positively. We examine the firm-performance mechanisms underlying favorable stock-market reactions based on an integration of perspectives from corporate social responsibility and the business case for diversity. Specifically, we estimate a hierarchical linear model (HLM) to account for the nested nature of our data (firms nested within states) and find that (1) the presence of LGBT-supportive policies is associated with higher firm value, productivity, and profitability, (2) the firm-value and profitability benefits associated with LGBT-supportive policies are larger for companies engaged in research and development (R&D) activities, and (3) the firm-value and profitability benefits of LGBT-supportive policies persist in the presence of state anti-discrimination laws. In supplemental analyses, we find that firms implementing (discontinuing) LGBT-supportive policies experience increases (decreases) in firm value, productivity, and profitability. We are among the first to link LGBT-supportive policies specifically to financial performance outcomes as well as to develop and test a multilevel model of these relationships. Our results have important implications for theory and research on LGBT issues in organizations, human resources managers, and policymakers.

Keywords: corporate social responsibility, diversity, firm performance, resource based view, LGBT

JEL Classification: J24, J71, M12, M14, M51

Suggested Citation

Pichler, Shaun and Blazovich, Janell L. and Cook, Kirsten A. and Huston, Janet McDonald and Strawser, William Robert, Do LGBT-supportive Corporate Policies Enhance Firm Performance? (August 1, 2016). Human Resource Management, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2243189 or http://dx.doi.org/10.2139/ssrn.2243189

Shaun Pichler

California State University, Fullerton

800 N State College St
Fullerton, CA 92831
United States

Janell Blazovich

University of St. Thomas ( email )

2115 Summit Avenue
AQU217
St. Paul, MN 55105
United States

Kirsten Cook (Contact Author)

Texas Tech University - Area of Accounting ( email )

P.O. Box 42101
Lubbock, TX 79409
United States

Janet Huston

University of South Florida ( email )

Tampa, FL 33620
United States
813-974-6744 (Phone)

William Strawser

University of Colorado Denver ( email )

1475 Lawrence St.
Campus Box 165 PO Box 173364
Denver, CO 80217
United States

Paper statistics

Downloads
355
Rank
70,480
Abstract Views
1,870