Same-sex Marriage Ban and Firm Social Performance

Abstract

Using the staggered U.S. state level laws , we investigate whether the ban s on the same-sex marriage affect companys' social performance s. We find a significant decrease in social pillar scores for firms headquartered in states that have adopted such laws (treatment firms) relative to other firms. Specifically, we discover that bans break the company's commitment to the community, evade the company's product responsibility, neglect the company's workforce, and pay less attention to human rights . We also provide direct evidence that the numbers of positive social event of treatment firms significant enormous drop after the adoption of the bans. This decreasing phenomenon is more pronounced for treatment firms in the states with more social organizations. These bans also have a negatively spillover effect on the company's ESG score, including corporate environmental and governance pillar scores. We thus conclude that the bans could be a good excuse for companies not to improve their ESG.

Keywords: Same-sex marriage, Social performances, ESG score, environmental and governance scores

JEL Classification: M14, J15, G30, K36