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

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

Economics Letters, 2025, vol. 252, issue C

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.

Keywords: Corporate social activism; Corporate social anti-activism; Social capital; DEI; Shareholder wealth; Stakeholder theory; Signaling theory (search for similar items in EconPapers)
JEL-codes: G11 G14 G41 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:252:y:2025:i:c:s0165176525002137

DOI: 10.1016/j.econlet.2025.112376

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