Doing Well By Doing Good

DOES THE STEELY-EYED stock market appreciate companies with good affirmative-action records? Yes, says a new study tracking 34 publicly traded companies that were awarded the U.S. Labor Dept.'s Exemplary Voluntary Effort Award. Each one's stock price enjoyed an uptick the day after the award was announced.

True, these hikes only ranged from 1/4 to 7/8. But they were statistically significant, says the study in Academy of Management Journal. The awards studied, from 1986 through 1992, were given during all kinds of markets.

One of the four researchers, University of Memphis Professor Peter Wright, thinks that Wall Street rewards companies able to attract and maintain diverse workforces, since minority employees will be an increasing presence. Hugh Johnson, chief investment officer at First Albany, speculates that stock traders may have concluded that socially conscious institutional investors, such as churches, would view the awards as a buy sign. Another possibility: It's seen as unlikely the winning company will face some costly federal mandate over employment practices. And absent any other news, good news often boosts a stock.

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