Browsing by Author "Pears, Geoffrey R"

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    Does ESG Honesty Pay? Evidence from LGBT Support and Disclosure
    (2024-04-18) Pears, Geoffrey R; Sivaramakrishnan, Konduru; Rountree, Brian
    Firm ESG strategy contains twoe lements: real support and disclosure. While correlated, real ESG support and disclosure of that support are separate decisions, and firms can do both, neither, or either one without the other. In an LGBT setting, I classify firms based on their real LGBT support and their disclosure of that support. I study the effects of full support, silent support, non-support, and virtue signaling, and I find that firms have lower net income, market share, revenue, and market capitalization when they are virtue signalers and when they are silent supporters. This is true both across firms and within firms over time, and the results are robust to selection adjustments and alternative variable measures. In cross-sectional tests, I show the results are weaker for firms in consumer-facing industries and stronger for firms with more diverse employee bases, suggesting the benefits of LGBT support and disclosure are driven by employee stakeholders and not consumers. Additionally, consistent with strategic ESG disclosure, I find that ESG support and disclosure decisions are driven by close competitors. Last, in a novel descriptive result, I show that LGBT non-support is concentrated in the quartile of industries with the lowest percentage of female and minority employees.