Corporate decisions on LGBT friendliness: a multi-level approach

Abstract

Purpose: This research investigates how and why firms adopt inclusive diversity activities, identifying the mechanisms behind firms involved in lesbian, gay, bisexual and transgender (LGBT)–friendly pursuits. By integrating resource dependence theory, institutional theory and stakeholder theory, the authors argue that a firm's LGBT friendliness is affected by marketing orientation and the external political environment. Design/methodology/approach: This study uses the Corporate Equality Index, as reported by the Human Rights Campaign, of 460 (1,540 firm-year observations) firms in the United States between 2006 and 2019. Findings: This study finds a significant, positive relationship between a firm's marketing orientation and LGBT-friendly activities. This research also determines that this relationship is weakened by state-level diversity policies and country-level political uncertainty. Originality/value: The study results provide unique theoretical and practical implications for the debate on inclusive corporate policy in similar global markets.