Document Type

Thesis

Date of Degree Completion

Spring 2026

Degree Name

Master of Science (MS)

Department

Cultural and Environmental Resource Management

Committee Chair

Dr. Yurim Lee

Second Committee Member

Dr. Toni Sipic

Third Committee Member

Dr. David Zuckerman

Abstract

This thesis examines how cultural and organizational factors shape investor responses to corporate sexual misconduct cases in the United States from 2019 to 2024. Using an event study framework, the analysis does not find a statistically significant or persistent decline in firm value around these cases. Short-term reaction is modest and fades over longer windows as prices recover. With only 89 firm-level events, this is best read as a null result rather than evidence that markets impose no penalty. Cross-sectional analysis incorporating Hofstede’s cultural dimensions, proxied through firm-level ESG metrics, reveals meaningful heterogeneity in market reactions: larger firms face stronger short-term penalties, whereas firms with greater operational efficiency and more balanced gender representation show resilience, indicating that firm size, efficiency, and workplace culture matter more than fundamental financial health in shaping investor responses. To further explore the firm-level determinants of misconduct exposure, the study employs propensity score matching and logit models. Firms with lower employee turnover are significantly less likely to experience misconduct cases, highlighting the role of workforce stability. In contrast, firms with more gender-diverse workforces and larger firms are more likely to report cases, consistent with greater visibility and reporting rather than higher underlying misconduct. Taken together, the findings reveal a disconnect between misconduct risk and market discipline, suggesting limits to market-based deterrence and underscoring the role of organizational culture in shaping both misconduct visibility and investor reactions. These findings suggest that financial markets are not an effective deterrent for corporate sexual misconduct, pointing to the need for stronger regulatory and disclosure frameworks.

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Available for download on Monday, July 24, 2028

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