The Risk of Marginal Ranking: A Replication and Extension of Lewis & Carlos (2023)

Conventional wisdom suggests that being included in an exclusive ranking leads to positive external evaluations. However, Lewis and Carlos (2023) found that firms situated near the threshold for inclusion on the 100 Best Corporate Citizen ranking were devalued by investors. To assess the generalizability of this surprising finding, we quasi-replicate and extend this finding by applying the same regression discontinuity design to the Fortune 500 ranking. We find corroborating evidence: firms near the bottom of the Fortune 500 receive lower external evaluations, not only from investors but also from industry peers. Our findings therefore quasi-replicate and extend Lewis and Carlos’ (2023) results by showing that negative reactions to marginal ranking are not limited to investors or to a single ranking context.