Workplace Anti‐Discrimination and Corporate Organization Capital: Evidence From State LGBTQ Protection Laws

ABSTRACT This paper examines how prohibiting LGBTQ workplace discrimination through state‐level Employment Non‐Discrimination Acts (ENDAs) affects corporate investments in organization capital. Using difference‐in‐differences analysis of US public firms from 1976 to 2020, we find ENDAs adoption causes a significant and persistent increase in various measures of organization capital. The positive impact is amplified for states and firms exhibiting greater ex ante acceptance of diversity. We also document that ENDAs increase corporate cash holdings and operating flexibility, validating employee protection as an intermediary channel. Our study demonstrates that ENDAs meaningfully increased corporate organization capital over the past four decades, highlighting how equal opportunity laws can enhance knowledge‐based assets and resilience by improving human capital retention, recruitment, and motivation.