TY - JOUR
T1 - LGBT-supportive corporate policies, risk aversion and mitigation and economic policy uncertainty
AU - Padungsaksawasdi, Chaiyuth
AU - Treepongkaruna, Sirimon
AU - Jiraporn, Pornsit
PY - 2023/3/14
Y1 - 2023/3/14
N2 - Purpose: The paper aims to investigate the effect of uncertain times on LGBT-supportive corporate policies, exploiting a novel text-based measure of economic policy uncertainty (EPU) that was recently constructed by Baker et al. (2016). LGBT-supportive policies have attracted a great deal of attention in the media lately. There is also a rapidly growing area of the literature that addresses LGBT-supportive policies specifically. Design/methodology/approach: The authors execute a regression analysis and several other robustness checks including propensity score matching (PSM) and an instrumental-variable analysis to mitigate endogeneity. Findings: The authors' results show that companies significantly raise their investments in LGBT-supportive policies in times of greater uncertainty, reinforcing the risk mitigation view where LGBT-supportive policies create moral capital with an insurance-like effect that mitigates adverse consequences during uncertain times. The effect of EPU on LGBT-supportive policies is above and beyond its effect on corporate social responsibility (CSR) in general. Originality/value: The authors' study is the first to explore the effect of uncertain times on LGBT-supportive corporate policies. The authors contribute to a crucial area of the literature that examines how firms respond to EPU. In addition, the authors enrich the literature on LGBT-friendly policies by showing that EPU is one of the significant determinants of LGBT-friendly policies.
AB - Purpose: The paper aims to investigate the effect of uncertain times on LGBT-supportive corporate policies, exploiting a novel text-based measure of economic policy uncertainty (EPU) that was recently constructed by Baker et al. (2016). LGBT-supportive policies have attracted a great deal of attention in the media lately. There is also a rapidly growing area of the literature that addresses LGBT-supportive policies specifically. Design/methodology/approach: The authors execute a regression analysis and several other robustness checks including propensity score matching (PSM) and an instrumental-variable analysis to mitigate endogeneity. Findings: The authors' results show that companies significantly raise their investments in LGBT-supportive policies in times of greater uncertainty, reinforcing the risk mitigation view where LGBT-supportive policies create moral capital with an insurance-like effect that mitigates adverse consequences during uncertain times. The effect of EPU on LGBT-supportive policies is above and beyond its effect on corporate social responsibility (CSR) in general. Originality/value: The authors' study is the first to explore the effect of uncertain times on LGBT-supportive corporate policies. The authors contribute to a crucial area of the literature that examines how firms respond to EPU. In addition, the authors enrich the literature on LGBT-friendly policies by showing that EPU is one of the significant determinants of LGBT-friendly policies.
KW - Corporate social responsibility
KW - Economic policy uncertainty
KW - LGBT-friendly
KW - LGBT-supportive
KW - Risk mitigation
KW - Uncertainty
UR - http://www.scopus.com/inward/record.url?scp=85122207360&partnerID=8YFLogxK
U2 - 10.1108/RBF-10-2021-0211
DO - 10.1108/RBF-10-2021-0211
M3 - Article
AN - SCOPUS:85122207360
SN - 1940-5979
VL - 15
SP - 240
EP - 256
JO - Review of Behavioral Finance
JF - Review of Behavioral Finance
IS - 2
ER -