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LGBT-supportive corporate policies, risk aversion and mitigation and economic policy uncertainty

Chaiyuth Padungsaksawasdi (Department of Finance, Thammasat Business School, Thammasat University, Bangkok, Thailand)
Sirimon Treepongkaruna (UWA Business School, University of Western Australia, Perth, Australia) (Research Unit in Sustainability in Finance and Capital Market Development, Sasin School of Management, Chulalongkorn University, Bangkok, Thailand)
Pornsit Jiraporn (Great Valley School of Graduate Professional Studies, Pennsylvania State University, Malvern, Pennsylvania, USA)

Review of Behavioral Finance

ISSN: 1940-5979

Article publication date: 4 January 2022

Issue publication date: 14 March 2023




The paper aims to investigate the effect of uncertain times on LGBT-supportive corporate policies, exploiting a novel text-based measure of economic policy uncertainty (EPU) that was recently constructed by Baker et al. (2016). LGBT-supportive policies have attracted a great deal of attention in the media lately. There is also a rapidly growing area of the literature that addresses LGBT-supportive policies specifically.


The authors execute a regression analysis and several other robustness checks including propensity score matching (PSM) and an instrumental-variable analysis to mitigate endogeneity.


The authors' results show that companies significantly raise their investments in LGBT-supportive policies in times of greater uncertainty, reinforcing the risk mitigation view where LGBT-supportive policies create moral capital with an insurance-like effect that mitigates adverse consequences during uncertain times. The effect of EPU on LGBT-supportive policies is above and beyond its effect on corporate social responsibility (CSR) in general.


The authors' study is the first to explore the effect of uncertain times on LGBT-supportive corporate policies. The authors contribute to a crucial area of the literature that examines how firms respond to EPU. In addition, the authors enrich the literature on LGBT-friendly policies by showing that EPU is one of the significant determinants of LGBT-friendly policies.



Padungsaksawasdi, C., Treepongkaruna, S. and Jiraporn, P. (2023), "LGBT-supportive corporate policies, risk aversion and mitigation and economic policy uncertainty", Review of Behavioral Finance, Vol. 15 No. 2, pp. 240-256.



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