Corporate socio-political activism and retail investors: Evidence from the Black Lives Matter campaign

Ruby Brownen-Trinh and Ayan Orujov

Journal of Corporate Finance, 2023, vol. 80, issue C

Abstract: This study investigates retail investor responses to corporate engagement in corporate socio-political activism (CSA). Using manually collected evidence of companies' support for the Black Lives Matter (BLM) campaign, we find that speaking up in support of BLM attracts retail investor attention. However, it influences their investment decisions only if speaking up is backed up by a monetary donation to BLM-related causes on the same day. This effect is observed for companies that have black directors on their board and companies headquartered in Democrat-leaning states. There is no corresponding increase in firm value. Our results suggest that retail investor preferences for companies that engage in CSA are likely guided by moral sentiment.

Keywords: Corporate socio-political activism; Black lives matter; Retail investors; ESG; Corporate social responsibility; Robinhood investors (search for similar items in EconPapers)
JEL-codes: A13 G14 G32 G34 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:80:y:2023:i:c:s0929119923000664

DOI: 10.1016/j.jcorpfin.2023.102417

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