Corporate Socio-political Activism and Retail Investors: Evidence from the Black Lives Matter Campaign

Ruby Brownen-Trinh; Ayan Orujov

doi:10.1016/j.jcorpfin.2023.102417

Corporate Socio-political Activism and Retail Investors: Evidence from the Black Lives Matter Campaign

Ruby Brownen-Trinh, Ayan Orujov

The Albert Gubay Business School

University of Bristol

Research output: Contribution to journal › Article › peer-review

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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.

Original language	English
Article number	102417
Journal	Journal of Corporate Finance
Volume	80
Early online date	13 Apr 2023
DOIs	https://doi.org/10.1016/j.jcorpfin.2023.102417
Publication status	Published - Jun 2023

Keywords

corporate socio-political activism
Black lives matter
Retail Investors
ESG
corporate social responsibility
Robinhood investors

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/j.jcorpfin.2023.102417Licence: CC BY-NC-ND

Final published versionFinal published version, 2.48 MBLicence: CC BY-NC-ND

1 Working paper

Corporate Support for Black Lives Matter: Determinants and Effects on Retail Investors
Brownen-Trinh, R. & Orujov, A., 15 Dec 2020, Social Science Research Network (SSRN).
Research output: Working paper

Cite this

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title = "Corporate Socio-political Activism and Retail Investors: Evidence from the Black Lives Matter Campaign",

abstract = "This study investigates retail investor responses to corporate engagement in corporate socio-political activism (CSA). Using manually collected evidence of companies{\textquoteright} 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.",

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N2 - 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.

AB - 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.

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KW - Black lives matter

KW - Retail Investors

KW - ESG

KW - corporate social responsibility

KW - Robinhood investors

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M3 - Article

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VL - 80

JO - Journal of Corporate Finance

JF - Journal of Corporate Finance

M1 - 102417

ER -

Corporate Socio-political Activism and Retail Investors: Evidence from the Black Lives Matter Campaign

Abstract

Keywords

UN SDGs

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Research output

Corporate Support for Black Lives Matter: Determinants and Effects on Retail Investors

Cite this