Corporate Sexual Equality and Firm Performance

Strategic Management Journal, Forthcoming

42 Pages Posted: 23 Nov 2016

See all articles by Liwei Shan

Liwei Shan

Southwestern University of Finance and Economics (SWUFE)

Shihe Fu

Xiamen University - The Wang Yanan Institute for Studies in Economics (WISE)

Lu Zheng

Tsinghua University

Date Written: November 21, 2016

Abstract

Previous studies have mixed findings on the relation between corporate socially responsible policies and firm performance. This paper focuses on a specific type of corporate social responsibility — corporate sexual equality, measuring how a firm treats its lesbian, gay, bisexual, and transgender (LGBT) employees, consumers, and investors — and examines whether and how it relates to firm performance. Using a longitudinal dataset of public firms in the U.S. during the period of 2002–2006, we demonstrate that firms with a higher degree of corporate sexual equality have higher stock returns and higher market valuation. We also identify one of the mediating channels, the labor market channel, that brings higher productivity to firms that embrace sexual equality.

Keywords: Corporate Sexual Equality, Firm Performance, Labor Market, LGBT, Corporate Social Responsibility

JEL Classification: G11, G12, J70, M14

Suggested Citation

Shan, Liwei and Fu, Shihe and Zheng, Lu, Corporate Sexual Equality and Firm Performance (November 21, 2016). Strategic Management Journal, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2873851 or http://dx.doi.org/10.2139/ssrn.2873851

Liwei Shan

Southwestern University of Finance and Economics (SWUFE) ( email )

55 Guanghuacun St,
Chengdu, Sichuan 610074
China

Shihe Fu (Contact Author)

Xiamen University - The Wang Yanan Institute for Studies in Economics (WISE) ( email )

A 307, Economics Building
Xiamen, Fujian 361005
China

Lu Zheng

Tsinghua University ( email )

Beijing, 100084
China

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