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Study finds Democrats care more

Companies in Bush-friendly states are less responsible


 

Are Democrats more caring than Republicans? A new study looking at the social responsibility scores of American companies suggests that they are. The research, conducted by finance professor Amir Rubin at B.C.’s Simon Fraser University, shows that firms based in states that vote Democrat are more socially responsible than firms in Republican states.

Published in the Financial Review, the study is based on the notion that companies in red states are more likely to be run by Republicans, while execs in blue states are likely to vote Democrat. To determine whether politics affects how well firms address environmental, humanitarian and sustainability concerns, Rubin compared voting patterns in the last election to the social responsibilty rating of almost 3,000 firms—about “98 per cent of the U.S. economy,” he says.

Overall, he found that about 14 per cent of American firms are “socially irresponsible,” according to data provided by KLD Research & Analytics. But in states where the majority of voters support George Bush, more than 17 per cent of firms failed the social-responsibility test. In Texas, where Bush got more than 60 per cent of the vote, almost 20 per cent of companies were socially irresponsible. Meanwhile, in Washington, where the Republican candidate received only nine per cent of the vote, every corporation received positive social-responsibility ratings.

Rubin says at first glance, the political link seems to be due to the types of firms you find in red and blue states. For instance, states that vote Democrat, such as California, tend to have lots of tech companies, which score well on social responsibility, whereas states that vote Republican, such as Texas, have more oil companies. “You can almost predict election results just by looking at the industry classification of a state,” Rubin says.

But even after controlling the findings for industry, size of firm and corporate structure, the link persists. Why? It could be that Democrats simply care more—but even Rubin doesn’t know for sure.


 

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