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

Isabel Costa Lourenço, Donatella Di Marco, Manuel Branco, Ana Isabel Lopes, Raquel Wille Sarquis and Mark T. Soliman
Additional contact information
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
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

JRFM, 2021, vol. 14, issue 12, 1-18

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.

Keywords: financial performance; LGBT; market value; resource-based theory; sexual orientation and identity; simultaneous equations (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.mdpi.com/1911-8074/14/12/596/pdf (application/pdf)
https://www.mdpi.com/1911-8074/14/12/596/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jjrfmx:v:14:y:2021:i:12:p:596-:d:699904

Access Statistics for this article

JRFM is currently edited by Ms. Chelthy Cheng

More articles in JRFM from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().