CEO Activism, Consumer Polarization, and Firm Performance

CEOs are increasingly engaging in activism on controversial social and political issues that do not directly affect their businesses. Simultaneously, the general public is increasingly polarized. We examine how CEO support for gun control after two mass shootings affects firm performance and polarizes consumers. Using mobile phone location data to measure store-level visits, we study (a) the net effect of activism on store performance, (b) the potential for polarization to create asymmetry in the activism’s effects on consumers, and (c) the persistence of those performance effects. We find that activism has small net effects on sales, polarizes consumers, has asymmetric effects across liberals and conservatives, and quickly dissipates. Our results highlight the strategic implications for executives pressured to take stances on controversial issues.