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Evidence on the Economic Consequences of Marriage Equality and LGBT Human Rights


The recent wave of same-sex marriage legalization marks the most significant human rights progress in decades. Nevertheless, the valuation effects on corporate America are unclear. While the arguments supporting marriage equality are largely in the domain of law and sociology, many prominent business leaders are actively engaged in campaigns advocating marriage equality. This suggests that the LGBT civil rights movement of our generation might have valuation implications for corporate America beyond human rights equality. This paper investigates the market perception of state-level same-sex marriage legalization by examining the short-window market reactions to firms headquartered in a state. We find positive market reactions to firms headquartered in states that legally recognize marriage equality. Further, we find that the market views companies more favorably in: (1) first-mover states before the Supreme Court ruling of United States v. Windsor, and (2) states that have stronger anti-discrimination laws for the LGBT community. Our findings complement prior research that focuses on the economic consequences of firm-level LGBT human rights policies by examining the state/nation-level legal impact, adding a new dimension to ethical practices that can have economic consequences.

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  1. In June 2020, the U.S. Supreme Court ruled in another landmark case Bostock v. Clayton County that discrimination on the basis of sexual orientation and gender identity is prohibited under Title VII of the Civil Rights Act of 1964. Nevertheless, protection against discrimination beyond employment, such as housing, credit, education, etc., especially at the state level, is still likely to face harsh backlash.

  2. For example, a discriminatory North Carolina law “led to a corporate boycott that, according to some estimates, could cost the state upwards of five billion dollars. PayPal canceled plans for a new operations center, Deutsche Bank nixed plans to expand in the state, and the N.B.A., N.C.A.A., and the A.C.C. all canceled plans to hold championship events there. Disney said that it would stop making movies in Georgia if the anti-LGBT bill became law. All of this was in line with what happened when Indiana faced a massive corporate boycott, including twelve conventions relocating away from the state, after it passed a so-called religious-freedom law” (The New Yorker 2016).

  3. Rosenberg (2008) argued that court decisions could consolidate social change, but courts could not prompt social change. Judicially mandated social reform may incite anger over “outside interference” or “judicial activism”, and mobilize greater resistance than change accomplished through legislatures. For example, in 2010 opponents of marriage equality led a successful effort to block the reelection of three Iowa Supreme Court justices who had joined that court’s unanimous decision to recognize same-sex marriage under the state’s constitution.

  4. As data for firms’ domestic partner benefits (DPB) from KLD database was discontinued after 2011, we do not have the data needed for all our periods to do the empirical analyses.

  5. We thank an anonymous reviewer for this observation.


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We thank Lee-Chin Institute CSR/Sustainability Research Grant for financial support; and valuable feedback from Diversity Section mid-year meeting Nov. 5, 2017, The Gender Equality Conference Nov. 16, 2017, and the 2018 CAAA Conference in Calgary. We take responsibility for any errors.

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Correspondence to Wally Smieliauskas.

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Appendix 1

Event dates by year and state

Year State Event date  
2003 Massachusetts November 18, 2003 Judicial
2008 Connecticut October 10, 2008 Judicial
2009 Iowa April 3, 2009 Judicial
  Vermont April 7, 2009 Legislative
  New Hampshire June 3, 2009 Legislative
  District of Columbia December 18, 2009 Legislative
2011 New York June 24, 2011 Legislative
2012 Maine November 6, 2012 Ballot
  Maryland November 6, 2012 Ballot
  Washington November 6, 2012 Ballot
2013 Rhode Island May 2, 2013 Legislative
  Delaware May 7, 2013 Legislative
  Minnesota May 14, 2013 Legislative
  California June 26, 2013 Judicial
  New Jersey September 27, 2013 Judicial
  Hawaii November 13, 2013 Legislative
  Illinois November 20, 2013 Legislative
  New Mexico December 19, 2013 Judicial
2014 Oregon May 19, 2014 Judicial
  Pennsylvania May 20, 2014 Judicial
  Indiana October 6, 2014 Judicial
  Oklahoma October 6, 2014 Judicial
  Utah October 6, 2014 Judicial
  Virginia October 6, 2014 Judicial
  Wisconsin October 6, 2014 Judicial
  Colorado October 7, 2014 Judicial
  Nevada October 7, 2014 Judicial
  West Virginia October 9, 2014 Judicial
  North Carolina October 10, 2014 Judicial
  Alaska October 12, 2014 Judicial
  Idaho October 15, 2014 Judicial
  Arizona October 17, 2014 Judicial
  Wyoming October 21, 2014 Judicial
  Kansas November 12, 2014 Judicial
  Montana November 19, 2014 Judicial
  South Carolina November 20, 2014 Judicial
2015 Florida January 6, 2015 Judicial
  Alabama February 9, 2015 Judicial
  Nebraska June 26, 2015 Judicial
  Arkansas June 26, 2015 Judicial
  Georgia June 26, 2015 Judicial
  Kentucky June 26, 2015 Judicial
  Louisiana June 26, 2015 Judicial
  Michigan June 26, 2015 Judicial
  Mississippi June 26, 2015 Judicial
  Missouri June 26, 2015 Judicial
  North Dakota June 26, 2015 Judicial
  Ohio June 26, 2015 Judicial
  South Dakota June 26, 2015 Judicial
  Tennessee June 26, 2015 Judicial
  Texas June 26, 2015 Judicial

Appendix 2

Defense of Marriage Act

The text of the bill below is as of Sep 10, 1996 (Passed Congress/Enrolled Bill).


One Hundred Fourth Congress

of the

United States of America


Begun and held at the City of Washington on Wednesday,

the third day of January, one thousand nine hundred and ninety-six

An Act

To define and protect the institution of marriage.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

Section 1: Short Title

This Act may be cited as the ‘Defense of Marriage Act’.

Sec. 2: Powers Reserved to the States

(a) IN GENERAL—Chapter 115 of title 28, United States Code, is amended by adding after section 1738B the following:

‘Sec. 1738C. Certain acts, records, and proceedings and the effect thereof

‘No State, territory, or possession of the United States, or Indian tribe, shall be required to give effect to any public act, record, or judicial proceeding of any other State, territory, possession, or tribe respecting a relationship between persons of the same sex that is treated as a marriage under the laws of such other State, territory, possession, or tribe, or a right or claim arising from such relationship.’.

(b) CLERICAL AMENDMENT—The table of sections at the beginning of chapter 115 of title 28, United States Code, is amended by inserting after the item relating to section 1738B the following new item:

‘1738C. Certain acts, records, and proceedings and the effect thereof.’.

Sec. 3: Definition of Marriage

(a) IN GENERAL—Chapter 1 of title 1, United States Code, is amended by adding at the end the following:

‘Sec. 7. Definition of ‘marriage’ and ‘spouse’

‘In determining the meaning of any Act of Congress, or of any ruling, regulation, or interpretation of the various administrative bureaus and agencies of the United States, the word ‘marriage’ means only a legal union between one man and one woman as husband and wife, and the word ‘spouse’ refers only to a person of the opposite sex who is a husband or a wife.’.

(b) CLERICAL AMENDMENT—The table of sections at the beginning of chapter 1 of title 1, United States Code, is amended by inserting after the item relating to section 6 the following new item:

‘7. Definition of ‘marriage’ and ‘spouse’.’.

Speaker of the House of Representatives.

Vice President of the United States and

President of the Senate.

Appendix 3

SEI Scorecard and State Scores

High Priority to Achieve Basic Equality (Score = 1)

In these states, advocates focus on raising support for basic equality for LGBT people, such as non-discrimination laws, work toward equality may focus on passing municipal protections for LGBT people or opposing negative legislation which would undermine LGBT equality.

Building Equality (Score = 2)

In these states, advocates work to build upon initial advances toward LGBT equality, such as the passage of a safe schools law and basic non-discrimination protections. Work in these states varies widely but may focus on opposing negative legislation, passing comprehensive non-discrimination, or creating recognition of LGBT families.

Solidifying Equality (Score = 3)

These states generally have several basic measures of equality including non-discrimination protections. Advocates work to ensure the broad implementation of these laws while advancing laws concerning parenting, youth, health, and safety to achieve full equality for the LGBT community.

Working Toward Innovative Equality (Score = 4)

These states have a broad range of protections to ensure equality for LGBT people, including comprehensive non-discrimination laws, safe schools laws, and advances in transgender healthcare. Advocates focus on implementation of laws and work toward innovative legislation that addresses the needs of vulnerable LGBT communities.

State Equality Index (SEI) by State

State Abbr SEI
Alabama AL 1
Alaska AK 1
Arizona AZ 1
Arkansas AR 1
California CA 4
Colorado CO 4
Connecticut CT 4
Delaware DE 3
Florida FL 1
Georgia GA 1
Hawaii HI 2
Idaho ID 1
Illinois IL 4
Indiana IN 1
Iowa IA 3
Kansas KS 1
Kentucky KY 1
Louisiana LA 1
Maine ME 3
Maryland MD 2
Massachusetts MA 3
Michigan MI 1
Minnesota MN 2
Mississippi MS 1
Missouri MO 1
Montana MT 1
Nebraska NE 1
Nevada NV 2
New Hampshire NH 2
New Jersey NJ 3
New Mexico NM 2
New York NY 3
North Carolina NC 1
North Dakota ND 1
Ohio OH 1
Oklahoma OK 1
Oregon OR 4
Pennsylvania PA 1
Rhode Island RI 2
South Carolina SC 1
South Dakota SD 1
Tennessee TN 1
Texas TX 1
Utah UT 2
Vermont VT 3
Virginia VA 1
Washington WA 4
West Virginia WV 1
Wisconsin WI 2
Wyoming WY 1
District of Columbia DC 4

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Zhu, J.Y., Smieliauskas, W. Evidence on the Economic Consequences of Marriage Equality and LGBT Human Rights. J Bus Ethics 178, 57–70 (2022).

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  • LGBT marriage equality
  • Economic effects
  • State-level legalization
  • US Supreme Court