Stakeholder Response to Firms’ Disclosure of Social Stances : Evidence from Voting Reform Laws

We examine stakeholder responses to publicly traded firms speaking out on voting reform laws in the U.S. State of Georgia via the lens of retail customer store traffic. For firms that speak out, we find that the number of customer visits and the number of visitors at their individual store locations decrease relative to the stores of firms that do not speak out. The decrease in customer traffic is stronger for store locations in Georgia, predominantly Republican counties, and for firms whose speaking out was emphasized by conservative media sources, while weaker for store locations in counties with higher Black populations. We provide further evidence that our results are attributed to a decrease in traffic from less frequent customers who spend less time shopping but offset by customers who increase their shopping time. Consistent with offsetting effects, we do not find evidence that speaking out is associated with changes in firm-level financial performance or an equity market response. Our findings highlight different customer responses to speaking out that help us better understand the implications of ESG disclosures