Abstract
This study investigates retail investor responses to corporate engagement in corporate socio-political activism (CSA). Using manually collected evidence of companies' support for the Black Lives Matter (BLM) campaign, we find that speaking up in support of BLM attracts retail investor attention. However, it influences their investment decisions only if speaking up is backed up by a monetary donation to BLM-related causes on the same day. This effect is observed for companies that have black directors on their board and companies headquartered in Democrat-leaning states. There is no corresponding increase in firm value. Our results suggest that retail investor preferences for companies that engage in CSA are likely guided by moral sentiment.
| Original language | English |
|---|---|
| Article number | 102417 |
| Journal | Journal of Corporate Finance |
| Volume | 80 |
| Issue number | 102417 |
| Early online date | 13 Apr 2023 |
| DOIs | |
| Publication status | Published - Jun 2023 |
Bibliographical note
Funding Information:The authors would like to thank Tracy Wang (the Editor), an anonymous referee, Chris Chapman, Giovanna Michelon, Mark Clatworthy, Emma Pugh, Adriana Korczak, Sonny Biswas, Amama Shaukat, Marion Van Den Bosch, participants of the 2020 Accounting and Finance Research Seminars at the University of Bristol Business School and at the Bangor Business School, and participants of the 2021 European Accounting Association Conference. All remaining errors are our own.
Publisher Copyright:
© 2023 The Authors
Keywords
- Corporate socio-political activism
- Black lives matter
- Retail investors
- ESG
- Corporate social responsibility
- Robinhood investors
