Investors’ Response to the #MeToo Movement: Does Corporate Culture Matter?

50 Pages Posted: 14 Oct 2019

See all articles by Mary Brooke Billings

Mary Brooke Billings

New York University

April Klein

New York University (NYU) - Department of Accounting

Crystal (Yanting) Shi

New York University (NYU), Leonard N. Stern School of Business, Department of Accounting, Students

Date Written: May 23, 2019

Abstract

This paper provides evidence that the #MeToo movement revised investors’ beliefs about the cost of fostering a culture that excludes women, as reflected by the absence of women directors in the board room. In particular, we document an overall negative market reaction tracking the timeline of events associated with the #MeToo movement, beginning with the Harvey Weinstein exposé in October of 2017 in the New York Times. This negative response concentrates in firms that have traditionally excluded women from their boards. In contrast, for companies that embrace the inclusion of women on their boards, this negative effect is moderated. Overall, investors appear to have revised their beliefs about the risks associated with future revelations of misconduct, and also about the value of having women in the board room shaping the culture of the firm.

Keywords: board of directors, gender, diversity, corporate culture

JEL Classification: M14, G34

Suggested Citation

Billings, Mary Brooke and Klein, April and Shi, Yanting, Investors’ Response to the #MeToo Movement: Does Corporate Culture Matter? (May 23, 2019). Available at SSRN: https://ssrn.com/abstract=3466326 or http://dx.doi.org/10.2139/ssrn.3466326

Mary Brooke Billings

New York University ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States
(212) 998-0097 (Phone)

April Klein (Contact Author)

New York University (NYU) - Department of Accounting ( email )

Stern School of Business
44 West 4th Street
New York, NY 10012
United States

Yanting Shi

New York University (NYU), Leonard N. Stern School of Business, Department of Accounting, Students ( email )

40 West 4th Street
Suite 10-98
New York, NY 10012
United States

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