Impact of Religiosity on LGBTQ Inclusiveness and Corporate Value

Abstract

Previous research finds that diversity and inclusion efforts improve corporate value. Likewise, previous research finds a positive correlation between some desired accounting measures and the religiosity of the population in an area. This study examines the relationship between Corporate Equality Index (CEI) ratings of support for the lesbian, gay, bisexual, transgendered, queer or questioning (LGBTQ) community, the religiosity of populations in the county in which corporate headquarters are located, and corporate value. A common notion is that religious people are less likely to support policies desired by LGBTQ people, and by extension, less LGBTQ support exists in more highly-religious communities. We find little indication that the religiosity of the people in the county where a corporate headquarters is located affects corporate CEI ratings or shareholder value as measured by Tobin’s q in general. This study offers a primary contribution because examination of the relationship between religiosity and LGBTQ policies is relevant and rare in the literature.

Keywords: Religiosity, Tobin’s q, LGBTQ, Corporate Equality Index, diversity

JEL Classification: G32, M12, M14, M40