IDEAS home Printed from https://ideas.repec.org/a/eee/riibaf/v66y2023ics0275531923001897.html
   My bibliography  Save this article

LGBT CEOs and stock returns: Diagnosing rainbow ceilings and cliffs

Author

Listed:
  • Shanaev, Savva
  • Skorochodova, Arina
  • Vasenin, Mikhail

Abstract

This study is the first to investigate the implications of lesbian, gay, bisexual, and transgender chief executive officers (LGBT CEOs) for stock performance, using an exhaustive sample of 26 LGBT publicly listed company CEOs since 2000. Firms with openly LGBT CEOs generate a statistically and economically significant monthly alpha of 0.69%− 1.08%, robust to portfolio weighting schemes, estimation frequency, multi-factor asset-pricing models, multicollinearity, sectoral allocation effects, and in subsamples in the United States and globally. The results imply that a “rainbow ceiling” exists with regards to LGBT executives, and that companies they lead are persistently undervalued due to discrimination by investors. LGBT CEOs on average represent small growth stocks with poor past performance, supporting the “rainbow cliff” hypothesis that the LGBT community is overrepresented in precarious leadership positions. Portfolios formed of stocks with LGBT CEOs robustly outperform broad market indices, evidencing attractiveness for ethical investment from both selfish and social perspectives.

Suggested Citation

  • Shanaev, Savva & Skorochodova, Arina & Vasenin, Mikhail, 2023. "LGBT CEOs and stock returns: Diagnosing rainbow ceilings and cliffs," Research in International Business and Finance, Elsevier, vol. 66(C).
    • Handle: RePEc:eee:riibaf:v:66:y:2023:i:c:s0275531923001897
    DOI: 10.1016/j.ribaf.2023.102063
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0275531923001897
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ribaf.2023.102063?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    LGBT; LGBTQ; Socially responsible investment; Workplace diversity; Discrimination; Rainbow ceiling;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:riibaf:v:66:y:2023:i:c:s0275531923001897. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ribaf .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.