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Investors’ response to the #MeToo movement : does corporate culture matter?
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Billings, Mary Brooke, Klein, April and Shi, Yanting Crystal (2022) Investors’ response to the #MeToo movement : does corporate culture matter? Review of Accounting Studies, 27 . pp. 897-937. doi:10.1007/s11142-022-09695-z ISSN 1380-6653.
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Official URL: http://dx.doi.org/10.1007/s11142-022-09695-z
Abstract
This paper provides evidence that the #MeToo movement revised investors’ beliefs about the costs (benefits) of fostering an exclusive (inclusive) culture, as reflected by the absence (presence of a critical mass) of women directors in the board room. Tracking a timeline of events associated with the #MeToo movement that begin with the Harvey Weinstein exposé in October 2017 in the New York Times, we document contrasting market reactions to the movement depending on the existing culture of the firm. Firms that historically excluded women from their board experienced a negative market response as momentum for the cause increased, whereas investors responded favorably to firms that historically embraced the inclusion of women on their boards. In contrast, we do not detect differences in the market’s response to randomly generated pseudo-events during the same time frame when comparing firms with exclusive and inclusive cultures. In the context of increased regulator attention to board gender diversity, as well as the ESG activist campaigns by large institutional investors, our study documents a shift in investors’ beliefs about the risks associated with sexual misconduct and about the value of having women in the boardroom shaping the culture of the firm.
Item Type: | Journal Article | ||||||||
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Subjects: | H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management |
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Divisions: | Faculty of Social Sciences > Warwick Business School | ||||||||
Library of Congress Subject Headings (LCSH): | Boards of directors, Women executives, Discrimination in employment, Sex discrimination in employment, Corporate governance, Diversity in the workplace, Corporate culture, Minorities -- Employment | ||||||||
Journal or Publication Title: | Review of Accounting Studies | ||||||||
Publisher: | Springer New York LLC | ||||||||
ISSN: | 1380-6653 | ||||||||
Official Date: | September 2022 | ||||||||
Dates: |
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Volume: | 27 | ||||||||
Page Range: | pp. 897-937 | ||||||||
DOI: | 10.1007/s11142-022-09695-z | ||||||||
Status: | Peer Reviewed | ||||||||
Publication Status: | Published | ||||||||
Access rights to Published version: | Open Access (Creative Commons) | ||||||||
Date of first compliant deposit: | 5 August 2022 | ||||||||
Date of first compliant Open Access: | 5 August 2022 | ||||||||
RIOXX Funder/Project Grant: |
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