Publication: Do LGBT-Supportive Corporate Policies Improve Credit Ratings? An Instrumental-Variable Analysis
Issued Date
2018-01-01
ISSN
15730697
01674544
01674544
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2-s2.0-85053269122
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Mahidol University
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SCOPUS
Bibliographic Citation
Journal of Business Ethics. (2018)
Suggested Citation
Pandej Chintrakarn, Sirimon Treepongkaruna, Pornsit Jiraporn, Sang Mook Lee Do LGBT-Supportive Corporate Policies Improve Credit Ratings? An Instrumental-Variable Analysis. Journal of Business Ethics. (2018). doi:10.1007/s10551-018-4009-9 Retrieved from: https://repository.li.mahidol.ac.th/handle/20.500.14594/44956
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Title
Do LGBT-Supportive Corporate Policies Improve Credit Ratings? An Instrumental-Variable Analysis
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Abstract
© 2018, Springer Nature B.V. We investigate the effect of Lesbian, Gay, Bisexual, and Transgender (LGBT)-supportive corporate policies on credit ratings. To the extent that LGBT-friendly policies are beneficial to the firm and therefore improve its expected cash flows, credit rating agencies should assign more favorable credit ratings to the firm. To alleviate endogeneity concerns, we exploit the variations in the LGBT populations across the states in the U.S. as our instrument. Our instrumental-variable (IV) analysis reveals that firms that adopt LGBT-supportive corporate policies enjoy better credit ratings, supporting the stakeholder and good management hypothesis. Further analysis using propensity score matching also yields consistent results.