Race-Related Events and Stock Prices

The role of race in American society is evolving driven by law-enforcement-linked Black deaths, Black Lives Matter protests, counter-protests, debates about Confederate monuments, and other race-related events. This raises questions about how changes in bias, systemic racism, and diversity affect U.S. corporations. Stock prices provide a window into this question. We find firm stock prices respond to race-related events with an estimated average cumulative impact of 3.5%. These responses are related to heterogeneity in firm size, managerial diversity, discrimination complaints, firm-location demographics, social media, and customer differences. We also find a structural break after the highly-visible murder of George Floyd