Employee responses to CEO activism

Anahit Mkrtchyan,, Jason Sandvik and Da Xu

Journal of Accounting and Economics, 2024, vol. 78, issue 1

Abstract: We examine employee responses to CEO activism, the increasingly common practice of CEOs taking public stances on socio-political issues. CEO activism may bolster employees' identification with their organizations and strengthen shared beliefs among employees. Alternatively, CEO activism may alienate employees if CEO stances contrast with employees' ideologies. We find that employee satisfaction is higher when CEOs engage in activism that is aligned with employees’ ideologies. Furthermore, firms with CEO activism experience a net inflow of productive, ideologically-aligned inventors, which contributes to increased firm-level innovation. The improvements in employee satisfaction and innovation constitute an important channel that connects aligned CEO activism to increased firm value.

Keywords: CEO activism; Employee satisfaction; Innovation; Human capital; Corporate culture; Diversity washing (search for similar items in EconPapers)
JEL-codes: G34 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaecon:v:78:y:2024:i:1:s0165410124000314

DOI: 10.1016/j.jacceco.2024.101701

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