LGBT-supportive corporate policies and firm performance: An analysis in the Brazilian context
DOI:
https://doi.org/10.1590/1808-057x20242168.ptKeywords:
LGBT+, diversity management, firm performance, signaling theory, GMMAbstract
This study examines the effect of LGBT+ (lesbian, gay, bisexual, transgender and other) diversity management on the performance of Brazilian listed companies. Empirical evidence on the impact of these LGBT-supportive corporate policies on firm performance is still scarce, and previous research has focused exclusively on the US context. The LGBT+ community is an emerging part of corporate culture, demanding attention from organizations and driving the adoption of LGBT-friendly practices. This groundbreaking study examines the impact of LGBT-supportive corporate policies on the performance of Brazilian firms, providing evidence that socio-cultural environmental variables should be included in econometric models due to differences in the acceptance of LGBT+ people across societies. Using the generalized method of moments (GMM), data from 2014 to 2022 are analyzed for 81 companies belonging to the Brazil 100 Index (IBrX-100). The results suggest that there is no relationship between LGBT-supportive corporate policies and firm performance in the Brazilian context. From the perspective of signaling theory, these results suggest that Brazilian companies are unable to reduce the information asymmetry that exists with their stakeholders regarding their LGBT-friendly practices and, consequently, there is no clear distinction between organizations with high and low commitment to LGBT-supportive corporate policies. To conduct the study, the Brazil LGBT+ Index was created to serve as a proxy for the level of commitment of Brazilian companies in managing the diversity of sexual minorities. The results of the study are useful for investors in their investment decision-making process and for LGBT+ people in their consumption and employment choices.
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