A Culture of Discrimination: Evidence on the Causes and Consequences of Civil Rights Litigation Against U.S. Corporations

57 Pages Posted: 6 Jan 2022 Last revised: 28 Aug 2022

See all articles by Casey Dougal

Casey Dougal

Florida State University

Thomas P. Griffin

Villanova University - Department of Finance & Real Estate

Irena Hutton

Florida State University - College of Business

Date Written: August 22, 2022

Abstract

Between 1992 and 2018, U.S. public corporations faced over 38,000 federal civil rights lawsuits. We find that the frequency of discrimination litigation varies with societal attitudes toward race and gender and intensifies after a rightward shift in local news slant. However, studying two well-established natural experiments, we find no evidence that economic forces provide a source of discipline. Consequences are small: shareholder value drops by $8.25 million, on average, around a lawsuit, with no effect on CEO turnover. We conclude that corporate discrimination is largely determined by the cultural values of employees, rather than a firm’s economic environment.

Keywords: Discrimination, culture, competition, shareholder value, CEO turnover

JEL Classification: G30, G32, J71, K31, M14

Suggested Citation

Dougal, Casey and Griffin, Thomas and Hutton, Irena, A Culture of Discrimination: Evidence on the Causes and Consequences of Civil Rights Litigation Against U.S. Corporations (August 22, 2022). Available at SSRN: https://ssrn.com/abstract=3967456 or http://dx.doi.org/10.2139/ssrn.3967456

Casey Dougal

Florida State University ( email )

Tallahasse, FL 32306
United States

Thomas Griffin (Contact Author)

Villanova University - Department of Finance & Real Estate ( email )

United States

HOME PAGE: http://www.thomaspgriffin.com

Irena Hutton

Florida State University - College of Business ( email )

821 Academic Way
Tallahassee, FL 32306-1110
United States
850.645.1520 (Phone)

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