Do LGBT workplace diversity policies create value for firms?

We show that the U.S. anti-discriminatory laws prohibiting discrimination in the workplace based on sexual orientation and gender identity (i.e. lesbian, gay, bisexual, and transgender (LGBT) identities) spur innovation, which ultimately leads to higher firm performance. We use the Human Rights Camp...

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Bibliographic Details
Authors: Hossain, Mohammed (Author) ; Ahmed, Ammad ca. 20./21. Jh. (Author) ; Atif, Muhammad (Author) ; Lokman, Mia ca. 20./21. Jh. (Author)
Format: Electronic Article
Language:English
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Published: Springer [2019-04-25]
In: Journal of business ethics
Year: 2020, Volume: 167, Issue: 4, Pages: 775-791
Further subjects:B Homosexuality
B Usa
B Innovation
B Sexuality
B Aufsatz in Zeitschrift
B Diversity management
B Success in business
B Firm Performance
B LGBT
B Workplace diversity
Online Access: Presumably Free Access
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520 |a We show that the U.S. anti-discriminatory laws prohibiting discrimination in the workplace based on sexual orientation and gender identity (i.e. lesbian, gay, bisexual, and transgender (LGBT) identities) spur innovation, which ultimately leads to higher firm performance. We use the Human Rights Campaign’s Corporate Equality Index (CEI) of 398 (1592 firm-year observations) U.S. firms between 2011 and 2014, and find a significantly positive relationship between CEI and firm innovation. We also find that an interacting effect of CEI and firm innovation leads to higher firm performance. We use our understanding of Rawls’ Theory of Justice and stakeholder theory to show that firms with workplace diversity policies are likely to be more innovative and perform better than those without such policies. Our results are robust to endogeneity, reverse causality and simultaneity issues. Our results will trigger debate in similar markets around the globe on the economic benefits of LGBT workplace diversity policies for firms. 
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