Cashing in on the culture wars? CEO activism, wokewashing, and firm value
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Cashing in on the culture wars? CEO activism, wokewashing, and firm value. / Melloni, Gaia; Patacconi, Andrea; Vikander, Nick.
I: Strategic Management Journal, Bind 44, Nr. 13, 25.07.2023, s. 3098-3121.Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt
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TY - JOUR
T1 - Cashing in on the culture wars? CEO activism, wokewashing, and firm value
AU - Melloni, Gaia
AU - Patacconi, Andrea
AU - Vikander, Nick
PY - 2023/7/25
Y1 - 2023/7/25
N2 - In this article, we examine under what conditions CEO activism—the practice of corporate leaders to take public stances on sociopolitical issues—can create firm value. In our model consumers care about the type of firm they buy from, but also understand that corporate leaders can make false or misleading statements to pander to valuable demographics. We show that, although the profitability of CEO activism is severely compromised by this wokewashing, under some conditions credible, value-enhancing sociopolitical communications can still take place. We characterize (i) when corporate leaders prefer to stay silent; (ii) when wokewashing is so widespread that no credible communication is possible; and (iii) when instead some credible communication can take place. We also show how an intrinsically motivated CEO can destroy or increase firm value.
AB - In this article, we examine under what conditions CEO activism—the practice of corporate leaders to take public stances on sociopolitical issues—can create firm value. In our model consumers care about the type of firm they buy from, but also understand that corporate leaders can make false or misleading statements to pander to valuable demographics. We show that, although the profitability of CEO activism is severely compromised by this wokewashing, under some conditions credible, value-enhancing sociopolitical communications can still take place. We characterize (i) when corporate leaders prefer to stay silent; (ii) when wokewashing is so widespread that no credible communication is possible; and (iii) when instead some credible communication can take place. We also show how an intrinsically motivated CEO can destroy or increase firm value.
U2 - 10.1002/smj.3542
DO - 10.1002/smj.3542
M3 - Journal article
VL - 44
SP - 3098
EP - 3121
JO - Strategic Management Journal
JF - Strategic Management Journal
SN - 0143-2095
IS - 13
ER -
ID: 361385729