Abstract: This study examines the relationship between the social performance profile of the organisation and its associated market effect using market measures of relative risk and excess profit. Specifically, we consider the market effect of Corporate Social Responsibility (CSR) as offered by the Human Rights Campaign (HRC) regarding organisational acceptance of Gay, Lesbian, Bisexual and Transgender individuals (GLBT). We find, consistent with economic theory, that organisations that have promulgated policies that support GLBT issues have a higher risk profile than firms judged by the HRC to be un-accepting of such agendas. However, we find no difference in the market return profile between the two HRC groups: Supportive and Un-Accepting. The conclusion is that organisations may adopt policies and projects supportive of the GLBT communities without fear of sacrificing their market profitably profile.
Edward J. Lusk and Beate Binkowski , 2006. How Does Diversity Play in the Market? A Study of the Stock Market Performance of HRC Classified Firms. The Social Sciences, 1: 128-132.