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The role of social capital on corporate social anti-activism and firm stock price: Evidence from DEI program elimination

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  • Nochebuena-Evans, Leiza
  • Evans, Robert D.
  • Tarkom, Augustine

Abstract

This study empirically investigates the impact of social capital on firm stock price following the adoption of corporate social anti-activism (CSAA). Using CSAA announcements from large, U.S.-based firms and social capital data, we find that firms located in regions with higher levels of social capital experience lower stock returns compared to those in areas with lower social capital. We observe that as social capital rises the effect becomes more pronounced. Our results are robust to alternative and newer measures of social capital. Overall, our study suggests that for firms that adopt CSAA, social capital has implications for financial markets.

Suggested Citation

  • Nochebuena-Evans, Leiza & Evans, Robert D. & Tarkom, Augustine, 2025. "The role of social capital on corporate social anti-activism and firm stock price: Evidence from DEI program elimination," Economics Letters, Elsevier, vol. 252(C).
    • Handle: RePEc:eee:ecolet:v:252:y:2025:i:c:s0165176525002137
    DOI: 10.1016/j.econlet.2025.112376
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    Keywords

    Corporate social activism; Corporate social anti-activism; Social capital; DEI; Shareholder wealth; Stakeholder theory; Signaling theory;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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