Rise of Conscious Consumers: Impact of Corporate Workplace Equality on Household Spending

46 Pages Posted: 7 Jun 2022 Last revised: 17 May 2024

See all articles by Ling Cen

Ling Cen

The Chinese University of Hong Kong

Yanru Han

Stevens Institute of Technology - School of Business

Chang Liu

City University of Hong Kong (CityU)

Jing Wu

The Chinese University of Hong Kong (CUHK) - CUHK Business School

Date Written: June 2, 2022

Abstract

We examine the impact of corporate workplace equality on household purchase decisions, as well as the underlying mechanisms. We first construct a measure of corporate workplace equality based on textual analysis of equal employment opportunity (EEO) statements in online job postings. We validate this measure by demonstrating its predictive power for future employment discrimination lawsuits and identifying the costs that deter low-equality firms from mimicking high-equality peers. We then show a positive correlation between corporate workplace equality and consumer spending and propose two economic channels: preference and innovation. To establish the preference channel, we demonstrate that the correlation between corporate workplace equality and consumer spending increases when consumer preferences experience exogenous shocks in major social events, such as the #MeToo Movement in 2017 and the Black Lives Matter Movement in 2020. This effect is particularly strong among gender and racial minority groups. To establish the innovation channel, we demonstrate a higher correlation between corporate workplace equality and consumer spending among more innovative industries and show that corporate workplace equality can predict innovation efficiency in terms of patent quantity, quality, originality, and generality. Overall, while existing OM studies focus on how practices of diversity, equity, and inclusion (DEI) affect corporate performance from the supply (producer) side, we fill the void in this literature by providing a complementary perspective from the demand (consumer) side.

Keywords: Corporate Workplace Equality, Conscious Consumers, Textual Analysis

JEL Classification: D12, D63, G30

Suggested Citation

Cen, Ling and Han, Yanru and Liu, Chang and Wu, Jing, Rise of Conscious Consumers: Impact of Corporate Workplace Equality on Household Spending (June 2, 2022). Available at SSRN: https://ssrn.com/abstract=4126216 or http://dx.doi.org/10.2139/ssrn.4126216

Ling Cen (Contact Author)

The Chinese University of Hong Kong ( email )

CYT Building
Sha Tin
Hong Kong, Hong Kong
Hong Kong

HOME PAGE: http:///sites.google.com/site/cenling/

Yanru Han

Stevens Institute of Technology - School of Business ( email )

Hoboken, NJ 07030
United States

Chang Liu

City University of Hong Kong (CityU) ( email )

83 Tat Chee Avenue
Kowloon
Hong Kong
53998480 (Phone)

Jing Wu

The Chinese University of Hong Kong (CUHK) - CUHK Business School ( email )

Cheng Yu Tung Building
12 Chak Cheung Street
Shatin, N.T.
Hong Kong

HOME PAGE: http://www.jingwulab.org

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