Stock price reactions to GLBT nondiscrimination policies

This study examines workplace issues of gay, lesbian, bisexual, and transgender (GLBT) employees. Specifically, we analyze the effect of firm GLBT nondiscrimination policies on that firm's stock market value. Corporate equality index (CEI) is used as a proxy for how firms manage GLBT issues. Results reveal that changes in firms' standardized CEI scores are positively associated with changes in firms' standardized stock price trend during the following year. Our findings suggest that the stock prices of firms with more progressive GLBT nondiscrimination policies relative to competing firms in the same industry outperform otherwise equivalent firms with lower CEI scores.