IDEAS home Printed from https://ideas.repec.org/a/gam/jjrfmx/v14y2021i12p596-d699904.html
   My bibliography  Save this article

The Relationship between LGBT Executives and Firms’ Value and Financial Performance

Author

Listed:
  • Isabel Costa Lourenço

    (Business Research Unit (BRU-IUL), Instituto Universitário de Lisboa (ISCTE-IUL), 1649-026 Lisbon, Portugal)

  • Donatella Di Marco

    (Business Research Unit (BRU-IUL), Instituto Universitário de Lisboa (ISCTE-IUL), 1649-026 Lisbon, Portugal
    Department of Social Psychology, Universidad de Sevilla, 41004 Sevilla, Spain)

  • Manuel Castelo Branco

    (Faculty of Economics, University of Porto, CEF.UP., OBEGEF, 4050-313 Porto, Portugal)

  • Ana Isabel Lopes

    (Business Research Unit (BRU-IUL), Instituto Universitário de Lisboa (ISCTE-IUL), 1649-026 Lisbon, Portugal)

  • Raquel Wille Sarquis

    (School of Economics, Business and Accounting, University of São Paulo (USP), São Paulo 13566-590, Brazil)

  • Mark T. Soliman

    (Marshall School of Business, University of Southern California, Los Angeles, CA 90089, USA)

Abstract

Drawing on resource-based theory, we analyze the relationship between having LGBT executives in a firm’s leadership positions and its value and financial performance. The existence of LGBT executives is considered to be associated with employee and customer goodwill towards LGBT-friendly policies and practices and to lead to human capital and reputational benefits. Our findings suggest that there is a positive effect of the presence of LBGT executives on a firm’s value, both directly and indirectly, through its effect on the firm’s financial performance. We interpret this as suggesting that besides the direct effect of the existence of LGBT executives on a firm’s value, an indirect effect also exists, mediated through financial performance, presumably through the effect that this has on employee and customer goodwill towards LGBT-friendly policies and practices. As far as we are aware, our study is the first to examine the impacts of the presence of LGBT executives, as well as distinguish between its direct and indirect effects on firm value.

Suggested Citation

  • Isabel Costa Lourenço & Donatella Di Marco & Manuel Castelo Branco & Ana Isabel Lopes & Raquel Wille Sarquis & Mark T. Soliman, 2021. "The Relationship between LGBT Executives and Firms’ Value and Financial Performance," JRFM, MDPI, vol. 14(12), pages 1-18, December.
    • Handle: RePEc:gam:jjrfmx:v:14:y:2021:i:12:p:596-:d:699904
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1911-8074/14/12/596/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1911-8074/14/12/596/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Manuel Branco & Lúcia Rodrigues, 2006. "Corporate Social Responsibility and Resource-Based Perspectives," Journal of Business Ethics, Springer, vol. 69(2), pages 111-132, December.
    2. Amama Shaukat & Yan Qiu & Grzegorz Trojanowski, 2016. "Board Attributes, Corporate Social Responsibility Strategy, and Corporate Environmental and Social Performance," Journal of Business Ethics, Springer, vol. 135(3), pages 569-585, May.
    3. Al-Shaer, Habiba & Zaman, Mahbub, 2016. "Board gender diversity and sustainability reporting quality," Journal of Contemporary Accounting and Economics, Elsevier, vol. 12(3), pages 210-222.
    4. Adams, Renée B. & Ferreira, Daniel, 2009. "Women in the boardroom and their impact on governance and performance," Journal of Financial Economics, Elsevier, vol. 94(2), pages 291-309, November.
    5. Demsetz, Harold & Villalonga, Belen, 2001. "Ownership structure and corporate performance," Journal of Corporate Finance, Elsevier, vol. 7(3), pages 209-233, September.
    6. van Knippenberg, Daan & Mell, Julija N., 2016. "Past, present, and potential future of team diversity research: From compositional diversity to emergent diversity," Organizational Behavior and Human Decision Processes, Elsevier, vol. 136(C), pages 135-145.
    7. Hyunkang Hur, 2020. "The role of inclusive work environment practices in promoting LGBT employee job satisfaction and commitment," Public Money & Management, Taylor & Francis Journals, vol. 40(6), pages 426-436, July.
    8. Mohammed Hossain & Muhammad Atif & Ammad Ahmed & Lokman Mia, 2020. "Do LGBT Workplace Diversity Policies Create Value for Firms?," Journal of Business Ethics, Springer, vol. 167(4), pages 775-791, December.
    9. Jordi Surroca & Josep A. Tribó & Sandra Waddock, 2010. "Corporate responsibility and financial performance: the role of intangible resources," Strategic Management Journal, Wiley Blackwell, vol. 31(5), pages 463-490, May.
    10. Liwei Shan & Shihe Fu & Lu Zheng, 2017. "Corporate sexual equality and firm performance," Strategic Management Journal, Wiley Blackwell, vol. 38(9), pages 1812-1826, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Brahma, Sanjukta & Gavriilidis, Konstantinos & Kallinterakis, Vasileios & Verousis, Thanos & Zhang, Mengyu, 2023. "LGBTQ and finance," International Review of Financial Analysis, Elsevier, vol. 86(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gull, Ammar Ali & Atif, Muhammad & Hussain, Nazim, 2023. "Board gender composition and waste management: Cross-country evidence," The British Accounting Review, Elsevier, vol. 55(1).
    2. Kara, Alper & Nanteza, Aziidah & Ozkan, Aydin & Yildiz, Yilmaz, 2022. "Board gender diversity and responsible banking during the COVID-19 pandemic," Journal of Corporate Finance, Elsevier, vol. 74(C).
    3. Wenqin Li & John Ziyang Zhang & Rong Ding, 2023. "Impact of Directors’ Network on Corporate Social Responsibility Disclosure: Evidence from China," Journal of Business Ethics, Springer, vol. 183(2), pages 551-583, March.
    4. Michael Greiner & Jing Sun, 2021. "How corporate social responsibility can incentivize top managers: A commitment to sustainability as an agency intervention," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(4), pages 1360-1375, July.
    5. Samuel Benjamin & Mansi Mansi & Rakesh Pandey, 2020. "Board gender composition, board independence and sustainable supply chain responsibility," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(4), pages 3305-3339, December.
    6. Paul B. McGuinness & João Paulo Vieito & Mingzhu Wang, 2020. "Proactive government intervention, board gender balance, and stakeholder engagement in China and Europe," Asia Pacific Journal of Management, Springer, vol. 37(3), pages 719-762, September.
    7. Shahbaz, Muhammad & Karaman, Abdullah S. & Kilic, Merve & Uyar, Ali, 2020. "Board attributes, CSR engagement, and corporate performance: What is the nexus in the energy sector?," Energy Policy, Elsevier, vol. 143(C).
    8. Yunyi Li & Charl de Villiers & Lina Zixuan Li & Leye Li, 2022. "The moderating effect of board gender diversity on the relation between corporate social responsibility and firm value," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 33(1), pages 109-143, March.
    9. Atif, Muhammad & Hossain, Mohammed & Alam, Md Samsul & Goergen, Marc, 2021. "Does board gender diversity affect renewable energy consumption?," Journal of Corporate Finance, Elsevier, vol. 66(C).
    10. Benjamin P. Foster & Andrew S. Manikas & James R. Kroes, 2023. "Which diversity measures best capture public company value?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(1), pages 236-247, January.
    11. Nurlan Orazalin & Mady Baydauletov, 2020. "Corporate social responsibility strategy and corporate environmental and social performance: The moderating role of board gender diversity," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(4), pages 1664-1676, July.
    12. Monica Violeta Achim & Viorela-Ligia Văidean & Andrada-Ioana Sabău Popa & Lavinia-Ioana Safta, 2022. "The impact of corporate governance on the digitalization process: empirical evidence for the Romanian companies," Digital Finance, Springer, vol. 4(4), pages 313-340, December.
    13. Wong, Jin Boon & Zhang, Qin, 2022. "Stock market reactions to adverse ESG disclosure via media channels," The British Accounting Review, Elsevier, vol. 54(1).
    14. Dolores Gallardo-Vázquez & Luis Enrique Valdez-Juárez & José Luis Lizcano-Álvarez, 2019. "Corporate Social Responsibility and Intellectual Capital: Sources of Competitiveness and Legitimacy in Organizations’ Management Practices," Sustainability, MDPI, vol. 11(20), pages 1-29, October.
    15. Wenbin Sun & Shanji Yao & Rahul Govind, 2019. "Reexamining Corporate Social Responsibility and Shareholder Value: The Inverted-U-Shaped Relationship and the Moderation of Marketing Capability," Journal of Business Ethics, Springer, vol. 160(4), pages 1001-1017, December.
    16. Zhaoyang Guo & Siyu Hou & Qingchang Li, 2020. "Corporate Social Responsibility and Firm Value: The Moderating Effects of Financial Flexibility and R&D Investment," Sustainability, MDPI, vol. 12(20), pages 1-17, October.
    17. Yimin Cheng & Xiaoyu Zhou & Kai Yao, 2023. "LGBT-Inclusive Representation in Entertainment Products and Its Market Response: Evidence from Field and Lab," Journal of Business Ethics, Springer, vol. 183(4), pages 1189-1209, April.
    18. Shaista Wasiuzzaman & Vasanthan Subramaniam, 2023. "Board gender diversity and environmental, social and governance (ESG) disclosure: Is it different for developed and developing nations?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(5), pages 2145-2165, September.
    19. Md. Abdul Kaium Masud & Mohammad Nurunnabi & Seong Mi Bae, 2018. "The effects of corporate governance on environmental sustainability reporting: empirical evidence from South Asian countries," Asian Journal of Sustainability and Social Responsibility, Springer, vol. 3(1), pages 1-26, December.
    20. Cegarra-Navarro, Juan-Gabriel & Reverte, Carmelo & Gómez-Melero, Eduardo & Wensley, Anthony K.P., 2016. "Linking social and economic responsibilities with financial performance: The role of innovation," European Management Journal, Elsevier, vol. 34(5), pages 530-539.

    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:gam:jjrfmx:v:14:y:2021:i:12:p:596-:d:699904. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.