Labor investment inefficiency and LGBTQ+-friendliness

Lisa  Schopohl; Andrew Urquhart; Hanxiong Zhang

doi:10.1016/j.irfa.2024.103469

Labor investment inefficiency and LGBTQ+-friendliness

Lisa Schopohl
, Andrew Urquhart
, Hanxiong Zhang

The Albert Gubay Business School

University of Reading

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

Abstract

We study the effect of firms’ LGBTQ+-friendliness on their labor investment efficiency and find that an improvement in firms’ LGBTQ+-friendliness leads to greater labor investment inefficiencies, and that more LGBTQ+-friendly firms tend to underinvest in labor. However, we show that this relationship diminishes over time as societal and legal support for LGBTQ+ equal rights increases. A variety of firm and societal characteristics moderate the negative link between corporate LGBTQ+-friendliness and labor investment efficiency.

Original language	English
Article number	103469
Journal	International Review of Financial Analysis
Volume	95
Issue number	Part B
Early online date	23 Jul 2024
DOIs	https://doi.org/10.1016/j.irfa.2024.103469
Publication status	Published - Oct 2024

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AB - We study the effect of firms’ LGBTQ+-friendliness on their labor investment efficiency and find that an improvement in firms’ LGBTQ+-friendliness leads to greater labor investment inefficiencies, and that more LGBTQ+-friendly firms tend to underinvest in labor. However, we show that this relationship diminishes over time as societal and legal support for LGBTQ+ equal rights increases. A variety of firm and societal characteristics moderate the negative link between corporate LGBTQ+-friendliness and labor investment efficiency.

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DO - 10.1016/j.irfa.2024.103469

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Labor investment inefficiency and LGBTQ+-friendliness

Abstract

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