Accounting, Organizations and Society xxx (xxxx) xxx

Contents lists available at ScienceDirect

Accounting, Organizations and Society

journal homepage: www.elsevier.com/locate/aos

Does information about gender pay matter to investors? An

experimental investigation*
Chelsea Rae Austin a, *, Donna D. Bobek a, Ling L. Harris b
a
University of South Carolina, USA
b
University of Nebraska - Lincoln, USA

a r t i c l e i n f o a b s t r a c t

Article history: The Organization for Economic Co-operation and Development (OECD) reports that a male favoring pay
Received 21 December 2017 gap exists in every one of its member countries. To reduce the gender pay gap, governments and in-
Received in revised form vestors are demanding that companies disclose gender pay information. While companies seem to resist
27 July 2020
these demands, there is little evidence about how investors might react to the disclosure of gender pay
Accepted 24 September 2020
Available online xxx
information. We draw on theories of fairness and the instrumental perspective of corporate social re-
sponsibility activities to predict how the disclosure of gender pay information influences investor
judgments. Our experimental findings indicate investors are more willing to invest in a company that
discloses gender pay equity compared to either a company disclosing a gender pay gap or one disclosing
no gender pay information. Further, our mediation analyses results show a sequential mediation process
whereby the gender pay disclosure affects perceptions of fairness (economic consequences) directly
(indirectly through fairness), with only perceptions of the economic consequences resulting from the
gender pay disclosure directly influencing willingness to invest. In addition, despite the presence of the
same sequential mediation relationship, we find limited evidence investors are less willing to invest in a
company that discloses a typical gender pay gap compared to a company disclosing no gender pay in-
formation. Two additional experiments indicate it is the information about gender pay, not its disclosure
by the company, that influences investors; and the effect is intentional. Our results are consistent with
investors anticipating real economic consequences from the disclosure of gender pay information.
© 2020 Published by Elsevier Ltd.

1. Introduction

*
Accepted by Mark Peecher. We are grateful to Andrew Collins, Laura Feustel,
Ryan Guggenmos (discussant), Amy Hageman, Khim Kelly, Siman Li (discussant),
Mary Marshall, Mark Peecher, Kristi Rennekamp, and participants and reviewers at
the 2017 FARS conference and the 2017 AAA annual conference for providing
insightful comments and suggestions. We also thank Paul Black, Laura Feustel, Erin
Hawkins, Sarah Judge, Ethan LaMothe, Kun Liu, Mary Marshall, Bryan Player, and
Nate Waddoups for providing helpful comments on the experimental instrument.
* Corresponding author.
E-mail addresses: chelsearae.austin@moore.sc.edu (C.R. Austin), donna.schmitt@
moore.sc.edu (D.D. Bobek), lharris6@unl.edu (L.L. Harris).
1
A gender pay gap is pervasive across countries and occupations (i.e., a male
favoring pay gap is present in every member country of the Organization for Eco-
nomic Co-operation and Development [OECD, 2019]). While information about
male to female pay ratios by individual company is not available in the US, ac-
cording to the BLS, in 2019, 78 (79) % of the 153 (14) occupations (industries) had
male favoring pay gaps between 10 and 30 cents (BLS, 2020). Thus, it is reasonable
to assume most individuals will expect there to be a gender pay gap at individual
companies similar to the widely publicized pay gap of 19% (hereafter, a “typical” pay
gap).
In the United States (US) women earn about 81 cents for every
dollar men earn (Bureau of Labor Statistics [BLS], 2020). This dif-
ference in pay between males and females is often referred to as the
“gender pay gap” and is common throughout the world.1 There are
many explanations for why a gender pay gap exists including dif-
ferences between men and women (e.g., job preferences, negotia-
tion style, hours worked, experience, etc.) and discrimination
(Chamberlain, 2016). Recently, governments and investors have
considered whether companies should publicly disclose gender pay
information. For instance, Germany, the United Kingdom (UK), and
the US require or have proposed requiring that certain companies
disclose gender pay information (Kallhoff & Zimmermann, 2017;
Meakin, 2019; Schmidt, 2019). Likewise, institutional investors in
the US have filed proposals at various companies requesting a
shareholder vote on such a disclosure (e.g., McGregor, 2019).
Although many such proposals have been voted down, support
from investors is increasing (e.g., up from 15% in 2017 to 26% in

https://doi.org/10.1016/j.aos.2020.101193
0361-3682/© 2020 Published by Elsevier Ltd.

Please cite this article as: C.R. Austin, D.D. Bobek and L.L. Harris, Does information about gender pay matter to investors? An experimental
investigation, Accounting, Organizations and Society, https://doi.org/10.1016/j.aos.2020.101193
C.R. Austin, D.D. Bobek and L.L. Harris
2019 at Bank of America [Reisinger, 2019]).
In this study, we conduct three experiments investigating how
investors’ judgments are influenced by a company’s gender pay
information. Our investigation is motivated by both theoretical and
practical perspectives. From a theoretical perspective, our investi-
gation provides the first evidence of the effect of gender pay in-
formation on investor judgments and explores the underlying
mechanisms associated with this effect. We also contribute to the
understanding of corporate social responsibility (CSR) practices
because gender pay equity is relevant to CSR practices (Grosser &
Moon, 2019; Thompson, 2008) such as female representation on
corporate boards of directors (Bear, Rahman, & Post, 2010;
Fernandez-Fiejoo, Romero, & Ruiz-Blanco, 2014) and gender
equality in the workplace. From a practical perspective, it is
important to investigate the effect of disclosing gender pay infor-
mation since investors and regulators must decide whether to
demand its disclosure; and companies must consider whether to
voluntarily disclose this information or continue to fight against its
release. Accordingly, we focus on two particularly relevant investor
perceptions related to the disclosure of gender pay information:
perceptions of fairness and anticipated economic consequences.
We rely on theories of distributive and procedural fairness
(Deutsch, 1975; Leventhal, 1980) and the liberal feminist perspec-
tive of equal opportunities for males and females (Metcalfe &
Woodhams, 2012) to predict that the disclosure of gender pay in-
formation will influence investors’ fairness perceptions. If investors
believe a gender pay gap is at least partly the result of discrimi-
nation, ceteris paribus, they should perceive gender pay equity (e.g.,
a male to female pay ratio of $1:$1) to be fairer than any gender pay
gap. A related line of research has examined the effect of CSR or CEO
pay disclosures on fairness perceptions and investment judgments.
For example, Brown-Liburd, Cohen, and Zamora (2018) find that
above (below) industry average investment in CSR leads investors
to perceive the company’s CSR activities as fair (less fair), which
partially explains their willingness to invest in the company. Kelly
and Seow (2016) show disclosing the CEO-to-employee pay ratio
affects investors’ perceived fairness of CEO pay and the investment
potential of the company.2 We posit gender pay information will
influence the perceived fairness of a company’s compensation
policies, and thus will affect investors’ willingness to invest in the
company (Fabozzi, Ma, & Oliphant, 2008; Hales, Matsumura, Moser,
& Payne, 2016; Hong & Kacperczyk, 2009).
While prior research has linked fairness perceptions of CSR ac-
tivities to willingness to invest, the instrumental perspective of CSR
argues that positive CSR activities can also lead to real economic
benefits for the company (e.g., Aguinis & Glavas, 2012; Hales et al.,
2016). For example, prior research finds charitable contributions by
companies, a type of CSR activity, are associated with future reve-
nue growth (Lev, Petrovits, & Radhakrishnan, 2010) and increased
employee effort (Balakrishnan, Sprinkle, & Williamson, 2011).
Similarly, liberal feminist theory argues there is a business case for
women’s equality and empowerment in the workplace, which can
lead to real economic benefits such as attracting a wider talent pool,
appealing to new customers, etc. (Grosser & Moon, 2019). Thus, the
2
Our investigation is different than Kelly and Seow (2016) in that we focus on
the pay scheme between individuals of different genders who may be at the same
rank. While investors may be able to justify a high CEO pay (e.g., based on the time
and talent required for the job), it may be harder for investors to justify a gender
pay gap if males and females are believed to have equal abilities. In addition, we
study a topic with broader social implications given that we focus on the median
male and median female employees of the company rather than a single individual
e the CEO e in a unique position within the company. Importantly, this study also
extends the analyses in Kelly and Seow (2016) by considering the effects on other
stakeholders, such as customers, and current and future employees.
2
Accounting, Organizations and Society xxx (xxxx) xxx
disclosure of gender pay information may lead investors to antici-
pate economic consequences for the company even if they expect
companies to have a gender pay gap. For instance, if a gender pay
disclosure shows a male favoring pay gap, negative economic
consequences may include consumer boycotts or highly qualified
female employees choosing to work elsewhere (Covert, 2017).
Conversely, positive economic consequence of disclosing gender
pay equity may be similar to the positive consequences of CSR ac-
tivities such as enhanced employee loyalty and/or increased sales
(Balakrishnan et al., 2011; Grosser & Moon, 2019; Hales et al., 2016;
Lev et al., 2010). Therefore, unlike previous fairness research (e.g.,
Brown-Liburd et al., 2018; Kelly & Seow, 2016), we also investigate
investors’ anticipation of the economic consequences of gender pay
information.
We predict investors will be more willing to invest in a company
that discloses gender pay equity compared to a company that dis-
closes a gender pay gap or no gender pay information. Further, we
predict the effect of gender pay information on willingness to invest
will be mediated by investors’ perceptions of fairness and the
anticipated economic consequences of the company’s compensa-
tion policies. We also predict investors will be at least as willing to
invest in a company that makes no gender pay disclosure compared
to a company that discloses a gender pay gap. Prior psychology and
accounting literature suggest that individuals’ expectations affect
their judgments and decisions (Clor-Proell, 2009; Eagly & Chaiken,
1975; Fiske & Pavelchak, 1986; Hirst, Koonce, & Simko, 1995).
Further, investors may not view the disclosure of a pay gap at a
specific company as “news” because investors may expect a com-
pany to have a typical pay gap given its prevalence and the related
publicity. If investors expect a company to have a gender pay gap
they may have already imputed that expectation into their judg-
ments. Thus, there may be no difference in willingness to invest in a
company that discloses a gender pay gap compared to a company
that discloses no gender pay information. On the other hand, the
disclosure of a pay gap may still discourage some investors from
investing because of the potential for negative publicity and/or
because the disclosed pay gap is larger than they expect.
To test these hypotheses, we use an experimental methodology
because there is little publicly available data and more importantly,
an experiment allows us to ex-ante examine the effect of gender
pay information on investor judgments while holding all other
factors constant. We conduct three between-participant experi-
ments with individuals recruited from Amazon’s Mechanical Turk
(Mturk). We use screening criteria related to education and
investing experience to ensure participants are appropriate proxies
for nonprofessional investors. We test our hypotheses in Experi-
ment 1, where we vary whether a hypothetical company discloses
information indicating it has gender pay equity, a gender pay gap,
or discloses no gender pay information.3 Participants then indicate
their willingness to invest in the company and assess the fairness
3
For simplicity, in this study we use equal pay (i.e., females earn $1 for every $1
males earn) as the operationalization of the theoretical construct of gender pay
equity. It is entirely possible pay could be unequal, yet still equitable (i.e., fair and
free of bias) or pay could be equal, yet not equitable because of other factors (e.g.,
hours worked, experience, productivity). However, either of these two latter op-
tions would require contextual information (e.g., males work more hours, or fe-
males have a higher starting salary because they have better grades, etc.). Thus,
ceteris paribus, equal pay is also equitable pay. In our experiments the operation-
alization of the gender pay gap is similar to the typical pay gap in the US. Specif-
ically, the information provided about the company in the gender pay gap condition
is that females earn 80 cents for each $1 males earn. In supplemental analyses we
consider how investors’ beliefs about the size of the actual pay gap in the US in-
fluence their judgments. However, we leave it to future research to investigate pay
gaps outside the typical range as well as explanations for a pay gap that would
convince investors, and others, that unequal pay is equitable.
C.R. Austin, D.D. Bobek and L.L. Harris
and anticipated economic consequences of the company’s
compensation policies.
The results from Experiment 1 provide interesting insights
regarding how a company’s gender pay information affects in-
vestors’ judgments. First, we find when a company discloses gender
pay equity, investors are more willing to invest in the company,
perceive the company’s compensation policies as fairer, and
anticipate more favorable economic consequences when compared
to a company that discloses a gender pay gap or discloses no gender
pay information. While we predict investors’ fairness perceptions
directly mediate their willingness to invest in the company, we find
that when anticipated economic consequences are in the model,
fairness perceptions only have an indirect effect on willingness to
invest. The results indicate a sequential mediation process whereby
perceived fairness leads to anticipated economic consequences,
which directly affect investors’ willingness to invest. Second, we
find investors also judge a company with a disclosed gender pay
gap as less fair and anticipate less favorable economic conse-
quences than a company that discloses no gender pay information.
However, we find limited evidence investors are less willing to
invest in a company that discloses a typical gender pay gap
compared to a company disclosing no gender pay information. This
may be because investors expect most companies to have a typical
gender pay gap due to its pervasiveness, and/or because disclosing
gender pay information, even a gender pay gap, reduces informa-
tion uncertainty (Botosan, 1997; Foster, 2003).4 Extensive sensi-
tivity analyses confirm the results are robust to the inclusion of
other potential explanatory variables such as participants’ beliefs
about the size of the actual gender pay gap and the extent to which
the pay gap is the result of discrimination, investment experience,
education, and gender.
In Experiment 2 we find no evidence that the source of the
gender pay information (i.e., the information being disclosed by a
company versus being revealed by a third-party website) affects
investors’ reactions. This suggests it is the information content of a
company’s gender pay practices, not the fact that the information
was disclosed by the company, that affects investors’ judgments. In
Experiment 3, we use a method similar to Elliott, Jackson, Peecher,
and White (2014) and find evidence that investors’ reactions to
gender pay information are deliberate and intentional. The results
of Experiment 1 are also replicated in Experiments 2 and 3.
Overall, this study makes several contributions, both theoretical
and practical. First, we extend prior accounting literature on CSR
(e.g., Zhang, 2008; Martin & Moser, 2012; Elliott et al., 2014; Brown-
Liburd et al., 2018) by focusing on gender pay equity, a specific and
relevant part of the large body of CSR practices. This is important
because CSR includes a wide range of activities, which likely affect
investors’ perceptions in different ways (Aguinis & Glavas, 2012;
Martin & Moser, 2012), and because Grosser and Moon (2019, p.
321) note CSR “practice has begun to engage with gender issues.” In
particular, our results support the instrumental perspective (e.g.,
Orlitzky, Schmidt, & Rynes, 2003) that has dominated the CSR
literature; that is, there is a business case for positive CSR activities,
4 crowd began to “audibly chant … ‘Equal Pay’” (Bachman, 2019;
In post-experimental questions we asked participants how much they believe
females make compared to males in the US. On average participants believe females
make around 84 cents for each dollar males earn, consistent with them expecting
there to be a gender pay gap. Further, there were no differences among conditions,
so the responses do not appear to be related to the experimental manipulation. We
also asked the participants in the no gender pay disclosed condition based on their
beliefs about US corporations in general: “At ABC Inc. what do you think about the
median compensation of male employees relative to female employees?” On
average participants responded that they thought “males make slightly more than
females.” This is also consistent with investors expecting a male favoring gender
pay gap.
3
Accounting, Organizations and Society xxx (xxxx) xxx
including gender pay equity, because these activities can provide
benefits including “employee loyalty, attractiveness to investors,
[and] new customer markets” (Grosser & Moon, 2019, p. 332).
Second, this study contributes to recent research on how percep-
tions of fairness affect investment judgments. Prior literature as-
sumes perceptions of fairness directly influence investment
judgments (e.g., Kelly & Seow, 2016; Brown-Liburd et al., 2018).
However, we find, in response to gender pay information, investors’
fairness perceptions only have an indirect effect on willingness to
invest; fairness perceptions lead investors to anticipate economic
consequences, which directly affects willingness to invest.
Lastly, this study provides relevant information to investors,
companies, and regulators regarding the possible effects of
disclosing gender pay information. We find limited evidence in-
vestors are less willing to invest in a company that discloses a
typical gender pay gap (i.e., male to female pay ratio of $1.00:$0.80)
compared to a company that discloses no gender pay information.
However, in supplemental analyses individuals in our study attri-
bute about half of the actual pay gap in the US to discrimination and
on average think companies should disclose gender pay informa-
tion. This suggests that if, in contrast to the typical gender pay gap,
a company has an atypically large and/or unexpected gender pay
gap, it is likely investors would judge this more unfavorably. Thus,
companies that currently have gender pay gaps may need to pro-
actively address them in anticipation of future pressure or regula-
tory requirements to disclose gender pay information. The results
also inform regulators who are contemplating whether to require
companies to disclose gender pay information, since we provide
empirical evidence that, all else equal, such information matters to
investors’ judgments and decisions.
2. Background and hypotheses development
2.1. Demand for gender pay disclosures
The gender pay gap refers to the situation where male em-
ployees are often paid more than female employees. A male fa-
voring gender pay gap is present in each of the 36 member
countries of the OECD and within the US a gender pay gap exists in
all but six of 153 listed occupations (BLS, 2020). Although the media
often quote different estimates of the gender pay gap, the most
recent data from the US Bureau of Labor Statistics (BLS, 2020) in-
dicates that during the first quarter of 2020 the median weekly
female earnings of $852 were 80.8% of the median weekly male
earnings of $1,054.
The gender pay issue attracts attention worldwide, particularly
on “Equal Pay Day.”5 In 2019, CNN, The New York Times, and The
Wall Street Journal, among others, featured articles on the gender
pay gap on Equal Pay Day. The gender pay gap has even made its
way into popular culture. For example, Cyndi Lauper appeared on
The Late Late Show to perform “Girls Just Want Equal Funds,” a
parody of her well-known hit “Girls Just Want to Have Fun” (Lauper,
2016). There have also been lawsuits filed alleging gender pay
discrimination. For instance, the US women’s soccer team case is so
well-known that following the team’s World Cup win in 2019 the
Hays, 2019).
In addition, regulatory requirements for companies to disclose
gender pay information are expanding. For example, Denmark
requires companies with 35 employees or more to report pay
5
This is the symbolic day indicating how far into the year women in the US must
work to catch up to men’s earnings in the previous year (i.e., March 31 in 2020,
April 2 in 2019, April 10 in 2018, etc.).
C.R. Austin, D.D. Bobek and L.L. Harris
information by gender (Agustin, 2015); and Germany requires
companies with at least 200 employees to disclose pay informa-
tion by gender to employees upon request (Kallhoff &
Zimmermann, 2017). Similarly, France requires large firms to
publish an equal pay index; and firms that perform poorly at the
end of three years may face a financial penalty of up to 1% of their
total payroll (Rubery, 2019). Furthermore, effective in 2018, Ice-
land requires companies to “undertake a certification of their
equal-pay programmes” (BBC, 2017; Lawless, 2017); and the UK
requires companies with more than 250 employees to publicly
disclose median pay by gender (Meakin, 2019). The UK also en-
courages companies with a gender pay gap to show an “action
plan” to close the gap. In the US, the Obama administration’s Equal
Pay Rule requires all companies with at least 100 employees to
report employee pay by gender to the government. After the
Trump administration halted this rule, in March of 2019 a federal
judge ruled that the government must start collecting the data
(Nat’l Women’s Law Ctr vs. Office of Management and Budget,
2019). Additionally, some US states have laws related to the
disclosure or certification of equal gender pay (e.g., Minnesota and
California).6
There are also calls for individual companies to disclose gender
pay information. For example, in 2019, as they have since at least
2015, the investment firm Arjuna Capital, submitted shareholder
proposals on behalf of its clients to twelve technology companies
and financial institutions (e.g., Alphabet, Facebook, JPMorgan
Chase, and Bank of America), requesting the disclosure of median
pay information by gender (Arjuna Capital, 2019). Companies, at
least initially, have not welcomed these proposals. Citigroup,
Apple, Amazon, Bank of America, WellsFargo, and Mastercard all
took legal action asking the Securities and Exchange Commission
(SEC) to omit similar proposals from their proxy materials. The
SEC rejected these requests (Foley, 2017; SEC, 2017; Arjuna
Capital, 2019).
Although there is continued resistance from companies, proposals
to disclose gender pay information are gaining the support of in-
vestors. EBay’s investors voted in favor of a gender pay disclosure
(Covert, 2017); and Citigroup, Inc. voluntarily disclosed that the me-
dian pay gap between its male and female employees was 29%. While
a gender pay disclosure was not approved by investors of either Bank
of America or WellsFargo in 2019, the proposals won the support of
26% and 23% of investors, respectively, up from 15% for both com-
panies in 2017, the first year the petition was on the ballot (Reisinger,
2019). Similar proposals at New York Mellon and Adobe also won the
support of 25% and 33% of shareholders, respectively (Reisinger,
2019). In addition to requesting the disclosure of gender pay infor-
mation from individual companies, institutional investors have asked
the SEC to issue guidelines on gender pay disclosures. For instance, in
2016, Pax Ellevate Management LLC petitioned the SEC to require
companies to disclose gender pay information (Teitelbaum, 2016).
This petition was later referenced as evidence of an increasing de-
mand for Environmental, Social, and Governance information (ESG)
by another petition from institutional investors who requested the
SEC issue a comprehensive framework on ESG (Williams & Fisch,
2018).
Despite the growing demand for gender pay information,
6
Minnesota’s Women’s Economic Security Act, effective in 2014, requires state
government contractors to obtain an Equal Pay Certificate. The California legislature
passed State Bill 171 in 2019 that requires certain companies to submit gender pay
information to the Department of Fair Employment and Housing, and these reports
are then available for use in enforcing California’s Equal Pay Act (Seyfarth Shaw LLP,
2019). This bill was passed after a 2017 bill, which required companies to disclose
differences in wages between males and females was vetoed by the governor
amidst fierce opposition from businesses in California (Mason, 2017).
4
Accounting, Organizations and Society xxx (xxxx) xxx
there is little research examining how individuals will react to
this information. Using archival data from Denmark, where
companies have been required to provide pay information by
gender since 2007, Bennedsen, Simintzi, Tsoutsoura, and
Wolvenzon (2020) identify some influence of gender pay dis-
closures on companies’ internal decisions. Specifically, they find
an association between gender pay disclosures and a decrease in
the gender pay gap primarily due to the slowing of wage growth
for male employees. In the present study, we consider how
gender pay disclosures influence investors, an important
“stakeholder group driven by instrumental, moral, and relational
motives” (Brown-Liburd et al., 2018, p. 275). Below, we predict
how investors will perceive the fairness and anticipated eco-
nomic consequences of a company’s disclosure of gender pay
information and how these perceptions will influence their
willingness to invest in the company.
2.2. Perceived fairness of gender pay information
Gender pay equity, by definition, is about the perceived fairness
of pay between males and females.7 Thus, the disclosure of infor-
mation comparing the pay of employees by gender will reveal
whether the company has gender pay equity or a gender pay gap,
and will naturally lead to perceptions of fairness. In particular, we
expect the disclosure of gender pay information to affect investors’
fairness perceptions because there are both distributive and pro-
cedural fairness implications related to gender pay equity/a gender
pay gap.8 Distributive fairness, as it relates to compensation, has
been viewed in many ways including, but not limited to, the
following factors: all receive outcomes proportional to their inputs;
all receive outcomes according to their ability, efforts, and accom-
plishments; and all have equal opportunity to compete without
favoritism or discrimination (Deutsch, 1975). To the extent out-
comes are distributed in a way that violates any one of these factors,
the outcomes may be viewed as unfair. Provided gender does not
directly affect an employee’s ability to complete job re-
sponsibilities, an employment contract affected merely by the
gender of the employee is discriminatory and is likely to be viewed
as unfair. Therefore, if investors believe that a male, or female, fa-
voring pay gap is a result of discrimination, their sense of distrib-
utive fairness will be violated.
Furthermore, Leventhal’s (1980) theory of procedural fairness
identifies six dimensions (i.e., rules) of procedural fairness. A
gender pay gap clearly violates at least one of these rules: the
consistency rule,9 which states “allocative procedures should be
consistent across persons and over time” (Leventhal, 1980, p. 25). To
the extent gender directly influences pay, the allocation of
compensation is not consistent across persons, suggesting a gender
pay gap violates the consistency rule, which prior research finds to
be the most influential facet of procedural fairness (e.g., Barrett-
Howard & Tyler, 1986). Consistent with theories of fairness
(Deutsch, 1975; Leventhal, 1980), liberal feminist theory also argues
for equal opportunities for male and females, which extends to
equitable pay (e.g., Benschop & Verloo, 2011). Thus, we expect, all
else equal, investors will perceive the compensation policies of a
company that discloses gender pay equity (a gender pay gap) to be
fair (unfair).
7
Dictionary.com defines equity as: “the quality of being fair … fairness …
something that is fair and just”, etc.
8
Brown-Liburd et al. (2018) find a positive relationship between investment in
CSR activities and fairness; investors view a company that values multiple stake-
holders is also more likely to treat investors fairly.
9
The other five rules are: bias-suppression, accuracy, correctability, representa-
tiveness, and ethicality.
C.R. Austin, D.D. Bobek and L.L. Harris
2.3. Anticipated economic consequences of gender pay information
Disclosure of gender pay information may also lead investors to
anticipate future positive or negative economic consequences for a
company. Disclosing information can change how investors eval-
uate the economic prospects of a company through two different
channels: reducing information uncertainty and changing in-
vestors’ expectations about the company’s future cash flows. As
Foster states in a 2003 FASB report (Foster, 2003, p. 1), “[m]ore
information always equates to less uncertainty, and … people pay
more for certainty.” This suggests disclosing additional information
reduces information uncertainty and in turn helps investors make
better investment decisions. Prior research (e.g., Barron & Qu, 2014;
Botosan, 1997; Healy & Palepu, 2001) confirms that investors are
willing to pay more for increased disclosure as it reduces infor-
mation asymmetry.
However, for many companies, disclosing gender pay information
will likely reveal a male favoring pay gap. Disclosing such a pay gap
would confirm that a gender pay gap exists at a specific company and
this may lead to unfavorable economic consequences. For example, a
confirmed gender pay gap may prompt consumers to organize
boycotts and employees to protest in response to perceived
discriminatory compensation policies (Grosser & Moon, 2008).
Similarly, disclosing a male favoring gender pay gap may also
generate the expectation that existing and/or future female em-
ployees will use this disclosure to more successfully negotiate higher
salaries or even seek legal action against the company. For example, a
class action suit alleging gender pay discrimination was filed against
Sterling Jewelers Inc., on behalf of 69,000 female employees
(Hersher, 2017, as of this writing the case is still pending).
On the other hand, given females’ roles as employees, cus-
tomers, supply chain workers, etc., a company’s disclosure of
gender pay equity may lead investors to anticipate positive future
economic consequences (Grosser & Moon, 2008, 2019). For
example, the instrumental perspective of CSR (e.g., Orlitzky et al.,
2003; Porter & Kramer, 2011) asserts there is a business purpose
for CSR because these activities can, among other things, enhance
employee loyalty while attracting investors and consumers. More
specifically, liberal feminist theory argues for equality of males and
females in the workplace and is consistent with gender pay equity
empowering female employees (Rittenhofer & Gatrell, 2012). Thus,
gender pay equity can provide real economic benefits to the com-
pany that include expanding the employee talent pool and
increasing employee loyalty and productivity (Ostergaard,
Timmermans, & Kristinsson, 2011; Hales et al., 2016).10 To the
extent investors recognize these benefits, they should anticipate
positive economic consequences for a company that discloses
gender pay equity. Overall, we expect a company disclosing gender
pay equity (a gender pay gap) will lead investors to anticipate
positive (negative) economic consequences.
2.4. Willingness to invest
We next argue that investors’ willingness to invest will be
affected by the perceived fairness and anticipated economic
10
We note that there are many critiques of the “moderate idea of achieving
equality of opportunity for women via gradual and incremental change” espoused
by the liberal feminist agenda (Rittenhofer & Gatrell, 2012, p. 207) for “failing to
develop radical challenges to existing employment paradigms” (Rittenhofer &
Gatrell, 2012, p. 207). However, critics also acknowledge incrementalism is more
likely to be accepted by governments and organizations. Further, liberal feminist
theory is consistent with the instrumental perspective of CSR in that there is a
business case for “women’s equality … in the workplace … and in the marketplace”
(Grosser & Moon, 2019, p. 334).
5
Accounting, Organizations and Society xxx (xxxx) xxx
consequences of a company’s disclosure of gender pay information.
Prior research shows perceived fairness is positively associated
with the favorability of individuals’ judgments and decisions. This
is documented in the setting of investor judgments related to in-
vestment in CSR (e.g., Brown-Liburd et al., 2018), as well as different
professional settings such as auditing (Jones, Massey, & Thorne,
2003), management accounting (Rutledge & Karim, 1999; Cohen,
Holder-Webb, Sharp, & Pant, 2007), and when serving on audit
committees (Bierstaker, Cohen, DeZoort, & Hermanson, 2012).
Archival research finds stocks that violate social norms (e.g., “sin”
stocks) are less attractive to individual investors, and thus investors
are willing to forgo these stocks (Fabozzi et al., 2008; Hong &
Kacperczyk, 2009).11 Kelly and Seow (2016) find investors
perceive it is less fair and react negatively to pay information when
a company discloses higher-than-industry average CEO-to-median
employee pay. In addition, research shows anticipated economic
consequences and future cash flows are related to future returns on
investment (Lamont & Polk, 2001), which should affect investors’
willingness to invest in a company.12 Therefore, we state
Hypothesis 1a as follows:
Hypothesis 1a. Investors will be more willing to invest in a
company that discloses gender pay equity compared to a company
that discloses a gender pay gap or a company that makes no gender
pay disclosure.
Due to the pervasive presence and related publicity of a gender
pay gap, it is quite possible investors will expect a company to have
a gender pay gap even when no disclosure is provided. Thus, since
prior research in psychology and accounting suggests individuals’
beliefs and expectations influence their judgments and decisions
(Clor-Proell, 2009; Eagly & Chaiken, 1975; Fiske & Pavelchak, 1986;
Hirst et al., 1995), investors may not view the disclosure of a gender
pay gap by a specific company as new information. Therefore, there
may be no difference in investors’ willingness to invest in a com-
pany that discloses a gender pay gap compared to a company that
discloses no gender pay information. On the other hand, the
disclosure of a gender pay gap, whether expected or unexpected,
may create the possibility of headline risk, similar to investors’
reactions to sin stocks (e.g., Fabozzi et al., 2008; Hong &
Kacperczyk, 2009). As such, investors may be less willing to
invest in a company that discloses a gender pay gap compared to a
company that discloses no gender pay information. Taken together,
we state Hypothesis 1b as follows:
Hypothesis 1b. Investors will be at least as willing to invest in a
company that makes no gender pay disclosure compared to a
company that discloses a gender pay gap.
As discussed above, and displayed in Fig. 1, we expect gender
11
The term “sin stocks” refers to shares in companies engaged in activities that
are considered unethical or immoral. Therefore, what investors consider as a sin
stock changes across time, and among or even within societies. Fabozzi et al. (2008)
identify companies in the gambling, tobacco, and alcohol industries as examples of
sin stocks.
12
An alternative view is that investors could react negatively to the disclosure of
gender pay equity. Friedman (1970) asserts that a company’s only responsibility and
objective is to maximize shareholder value; the “Friedman Doctrine” has been a
dominant assumption throughout economic, finance, and accounting research
(Huang & Wilson, 2015). Under this view, investors inherently trust that manage-
ment is minimizing expenses to maximize profits; thus, maximizing returns to
shareholders. If a company discloses gender pay equity, investors may believe
management is failing to minimize employment expenses, which may also lead to
the belief that managers are failing to minimize other company expenses; and thus,
failing in their principal duty to shareholders. If investors do not trust management
will maximize their returns, they may be less willing to invest in the company.
However, research showing that investors value CSR activities suggests this view is
unlikely to be pervasive (e.g., Elliott et al., 2014).
C.R. Austin, D.D. Bobek and L.L. Harris Accounting, Organizations and Society xxx (xxxx) xxx

Fig. 1. Predicted model.

Fig. 1 presents the predicted relationships based on the hypotheses. GENDER PAY INFORMATION is the manipulated variable. The text of the manipulations is displayed in Appendix
1. H1a predicts investors will be more willing to invest when a company discloses gender pay equity; and H1b predicts investors will be at least as willing to invest in a company
that makes no gender pay disclosure compared to one that discloses a gender pay gap. H2a (H2b) predicts FAIRNESS (ECONOMIC CONSEQUENCES) will mediate the relationship
between GENDER PAY INFORMATION and WILLINGNESS TO INVEST. The solid lines represent these formally stated hypotheses. The dotted line is an un-hypothesized expectation
that at least some of the anticipated economic consequences result from investors’ fairness perceptions.
FAIRNESS represents the perceived fairness of the company’s compensation policies. See Table 3.
ECONOMIC CONSEQUENCES represents the anticipated economic consequences of the company’s compensation policies. See Table 4.
WILLINGNESS TO INVEST represents investors’ overall willingness to invest in the company. See Table 2.

pay information to affect investors’ willingness to invest through at
least two channels. Accordingly, we predict both perceptions of
fairness and anticipated economic consequences mediate the
relationship between gender pay information and willingness to
invest. Stated formally:
Hypothesis 2a. Perceived fairness of a company’s compensation
policies mediate the effect of gender pay information on investors’
willingness to invest in a company.
Hypothesis 2b. Anticipated economic consequences of a com-
pany’s compensation policies mediate the effect of gender pay in-
formation on investors’ willingness to invest in a company.
However, some of the anticipated economic consequences are
predicated on the possibility that employees and/or consumers
may perceive the compensation policies of a company that dis-
closes gender pay equity (a gender pay gap) to be fair (unfair). For
example, investors may anticipate that others will find the pay gap
to be unfair and thus may be concerned that consumers and/or
employees could take steps that will result in negative conse-
quences (e.g., consumer boycotts or employee lawsuits). Thus,
while not formally hypothesized, in addition to gender pay infor-
mation having a direct effect on anticipated economic conse-
quences, Fig. 1 also includes the possibility that perceived fairness
influences willingness to invest indirectly through its effect on in-
vestors’ anticipation of economic consequences.
3. Experiment 1 methods
3.1. Participants
Participants were recruited from MTurk in the summer of 2019
and offered compensation of $1.00 plus a bonus of $1.00 for following
instructions. The experiment was administered through Qualtrics;
participants took an average of 13 minutes to complete the experi-
ment. To participate, individuals were required to pass five screening
criteria: 1) be at least 25 years old; 2) have a high school diploma or
higher; 3) have at least one college accounting or finance class; 4) have
at least 2 years of investment experience; and 5) be a native English
speaker. In addition, we required potential participants to be US res-
idents and, as recommended by Finley (2015), to have completed at
least 500 prior tasks on Mturk with a 95% approval rating or better.
Table 1, Panel A summarizes the demographics of the 309 qualified
participants included in the analyses.13
Table 1, Panel A indicates that 64% (62%) of participants report
taking two or more accounting (finance) courses; while 64% have
taken a financial statement analysis course. Ninety-five percent of
participants report having experience in analyzing financial state-
ments; and 45% have at least six years of investment experience,
with the rest reporting two to five years of such experience. Eighty-
nine percent of participants plan to invest in the next five years. The
demographic information about the participants suggests they are
nonprofessional investors with basic knowledge of corporate dis-
closures. Also, as shown in Table 1, Panel B, on average participants
believe publicly traded companies should be required to disclose
gender pay information and believe gender pay equity is important.
All the means reported in Table 1, Panel B are significantly above the
scale midpoint (p < 0.001).14
13
A total of 334 MTurk workers participated in Experiment 1; 25 responses are
excluded, resulting in 309 usable responses. Of these 25 excluded responses, 12 did
not finish, eight had duplicate IP addresses, and five missed the attention check
item towards the end of the experiment that said “for quality control purposes
select ‘agree’ for this statement.” However, their inclusion or exclusion in the an-
alyses has no effect on our inferences or conclusions. We offered a bonus to
incentivize participants to pay careful attention to the details of the experiment. All
of the 309 participants included in the analyses earned the bonus. This study
received proper approval from the Institutional Review Board at the university
where the study was conducted.
14
Note, the items displayed in Table 1, Panel B were collected with the post-
experimental items. In addition, the responses to these items support the argu-
ment that there is a demand for companies to provide gender pay information.
Further, all reported p-values are two-tailed unless stated otherwise.

6
C.R. Austin, D.D. Bobek and L.L. Harris Accounting, Organizations and Society xxx (xxxx) xxx

Table 1
Experiment 1.

Panel A: Sample Demographics n ¼ 309

Gender Financial Statement Analysis Course

Male 57% Yes 64%
Female 43% No 36%
Age Financial Statement Analysis Experience
25 to 34 45% Never 5%
35 to 44 34% 1e5 times 58%
45 to 54 13% 6-10 times 15%
55 to 59 6% >10 times 22%
60 or older 2% Investment Experience
Education 2e5 years 55%
Less than high school e 6e10 years 23%
High school Diploma 3% More than 10 years 22%
Some college courses 20% Plans for Future Stock Ownership
College graduate 58% Yes 89%
Post-graduate courses 19% No 11%
Incomea Current Workplace
Less than $30,000 13% Female earn more 4%
$30,000 to $49,999 25% Males earn more 25%
$50,000 to $69,999 23% Females and males earn the same 30%
$70,000 to $99,999 23% I don’t know 31%
$100,000 or more 16% Self-employed/Not employed 10%
Relevant Course Work Acct. Fin.
One college level course 36% 38%
Two college level courses 34% 31%
Three college level courses 10% 10%
Four college level courses 8% 8%
> Four college level courses 12% 13%

Panel B: Pay Equity Opinions All Participants (n ¼ 309) Males (n ¼ 177) Females (n ¼ 132) Test of difference between genders

Publicly traded companies should be required to disclose median pay t ¼ 3.23

for males and females separately. 5.31 5.06 5.65 df ¼ 307
(1.61) (1.73) (1.38) p ¼ 0.001
It is important for companies to aim for gender pay equity. t ¼ 3.08
5.85 5.64 6.12 df ¼ 307
(1.37) (1.52) (1.08) p ¼ 0.002
Male and female employees should be paid the same for the same job. t ¼ 2.24
6.15 6.03 6.30 df ¼ 307
(1.07) (1.15) (0.94) p ¼ 0.026

Notes:
Cell entries in Panel B are the mean (standard deviation) responses based on the following instructions: “Please answer the extent of your agreement based on your personal
beliefs, perceptions, and experiences. There are no right or wrong answers.” The response scale is a 7-point Likert scale where 1 ¼ strongly disagree and 7 ¼ strongly agree.
Responses do not differ between conditions and all means are significantly above the scale midpoint (all p < 0.001, df ¼ 308). These items were collected as part of the post
experiment questions, after participants responded to the main experiment.
a
Percentages are based on participants who willingly responded.

3.2. Experimental design compensation policies. On the screens where participants respond
to the willingness to invest, fairness, and economic consequence
Experiment 1 is a 3 X 1 between participants experiment. Par- items, they are also provided a link to the information about ABC
ticipants assume the role of a potential investor who is considering Inc. (i.e., the background, financial, and compensation information)
whether to invest in a hypothetical company, ABC Inc., in the retail so they can refer back to this information if they choose. Finally,
industry. The experimental materials are based on a real disclosure they respond to manipulation check and post-experimental items.
in the 10-K filing of a publicly traded company. All participants view
three screens about ABC Inc. prior to responding to the dependent
3.3. Manipulated and dependent variables
variable and process measures. The first two screens are identical in
all conditions. The first screen contains background information
ABC Inc.’s compensation information from its 2018 annual
(e.g., information about the company’s products and marketing
report is provided to participants in all conditions; however, the
strategies); while the second screen contains selected financial
information provided constitutes the manipulated variable,
information about the company (i.e., an abbreviated income
GENDER PAY INFORMATION, varied at three levels. In the equity
statement for 2017 and 2018). Next, participants observe the
disclosed condition, participants are informed the median net
manipulated disclosure of employee pay information, discussed in
compensation of male (female) employees is $41,975 ($41,797) and
more detail below. Then, all participants indicate their willingness
the ratio of male to female compensation is $1.00 to $1.00. We
to invest in the company; the following two screens collect the
acknowledge pay could be unequal, yet still equitable (i.e., fair and
process measures, items assessing fairness perceptions and the
free of bias) or equal, yet unequitable, because of other factors (e.g.,
anticipated economic consequences of the company’s
hours worked, experience, productivity). However, to avoid

7
C.R. Austin, D.D. Bobek and L.L. Harris
possible confounds, we operationalize gender pay equity as equal
pay between females and males because absent additional
contextual details, equal pay should be assumed to be equitable. In
the gap disclosed condition, participants are informed the median
net compensation of male (female) employees is $46,540 ($37,232)
and the ratio of male to female compensation is $1.00 to $0.80. In
the no gender pay disclosed condition, participants are only
informed the median net compensation of employees is $41,886.
The text of the pay disclosure for each of the three conditions is
displayed in Appendix 1. The amounts used in the manipulation are
based on the actual median pay of employees in the US (BLS, 2020),
and thus the ratio of $1.00 to $0.80 in the gap disclosed condition is
similar to the typical gender pay gap in the US. In the US, the pay
gap is approximately 19% (i.e., females make on average 81 cents for
each dollar males earn). The BLS (2020) also reports in 2019 that 78
(79) % of the 153 (14) occupations (industries) had male favoring
pay gaps between 10 and 30 cents. Thus, in our experiments the
operationalization of the gender pay gap is similar to the typical pay
gap in the US.
The primary dependent variable is participants’ overall WILL-
INGNESS TO INVEST in ABC Inc., which is the average of responses
to six items each measured on a 101-point scale where 50 (þ50)
indicates a participant is very unwilling (very willing) to invest. The
six items are displayed in Appendix 2 and assess participants’
willingness to invest on three dimensions: 1) the attractiveness of
the company as an investment; 2) whether the company’s stock
price will increase or decrease in the future; and 3) the likelihood of
investing an endowment of $10,000 at each of three alternative
prices at which the stock is trading.15 Thus, the composite depen-
dent measure, WILLINGNESS TO INVEST, captures both the imme-
diate attractiveness of ABC Inc. as an investment and how
participants’ beliefs about the future prospects of the company may
affect its stock prices. The reliability analysis shows a Cronbach’s
alpha of 0.795, and factor analysis confirms the six items load on
one factor, with an Eigenvalue of 3.082.
4. Experiment 1 results
4.1. Manipulation check
Responses to the manipulation check item indicate participants
were sensitive to the gender pay information manipulation as 71%
of all participants correctly recalled the compensation information
they viewed about the hypothetical company. Specifically, 73% (73%
and 66%) of participants in the equity disclosed (gap disclosed and
no gender pay disclosed) conditions correctly indicated they read
information about gender pay equity (a gender pay gap and no
gender pay information).16
4.2. Test of Hypothesis 1
Table 2, Panel A provides means and standard deviations for
WILLINGNESS TO INVEST as well as each of the six items included in
the scale. Hypothesis 1 (H1) predicts a company’s gender pay
disclosure will affect investors’ willingness to invest in the com-
pany. We conduct a one-way ANOVA with GENDER PAY INFOR-
MATION as the independent variable and WILLINGNESS TO INVEST
15
These dimensions are similar to those used in prior research to capture par-
ticipants’ willingness to invest (e.g., Elliott et al., 2014; Elliott, Grant, & Rennekamp,
2017; Fanning, Harris, Jackson, & Stern 2019; Kelly & Seow, 2016; Rennekamp 2014;
Tan & Koonce, 2011).
16
The Hypothesis testing includes all 309 participants. The inferences and con-
clusions of the hypothesis testing are unchanged if we conduct the analyses
excluding participants who incorrectly responded to the manipulation check.
8
Accounting, Organizations and Society xxx (xxxx) xxx
as the dependent variable. The ANOVA results are shown in Table 2,
Panel B. We observe a significant main effect (F-statistic ¼ 5.09,
p ¼ 0.007), indicating the gender pay disclosure has a significant
effect on WILLINGNESS TO INVEST. Table 2, Panel C presents the
results of planned contrasts used to test H1a and H1b. Specifically,
participants in the equity disclosed condition are significantly more
willing to invest in a company than those in the gap disclosed
condition and the no gender pay disclosed condition (p ¼ 0.001,
one-tailed), supporting H1a.17 In addition, supporting H1b, WILL-
INGNESS TO INVEST is not significantly different between the gap
disclosed and the no gender pay disclosed condition (p ¼ 0.345).
4.3. Test of Hypothesis 2
Hypothesis 2 (H2) predicts perceptions of fairness and economic
consequences of a company’s compensation policies mediate the
effect of gender pay information on investors’ willingness to invest
in a company. We first explore the relationship between the gender
pay disclosures and FAIRNESS and ECONOMIC CONSEQUENCES.
Then, to test H2, we employ mediation analysis using Process
(Preacher & Hayes, 2004) with 5000 bias-corrected bootstrapping
resamples to create a distribution of estimates of the indirect effects
of GENDER PAY INFORMATION on WILLINGNESS TO INVEST.
4.3.1. Fairness
As displayed in Table 3, Panel A, FAIRNESS comprises six items
adapted from Colquitt (2001) that measure distributive justice and
procedural justice. The reliability analysis shows a Cronbach’s alpha of
0.926, and the factor analysis indicates the six items load on one factor
with an Eigenvalue of 4.495. Thus, we use the average of participants’
responses to these six items to capture their perceived fairness of the
company’s compensation policies.18 Table 3, Panel A also provides
means and standard deviations for FAIRNESS by condition.
As shown in Table 3, Panel B, an ANOVA reveals a significant
main effect of GENDER PAY INFORMATION (p < 0.001) on FAIRNESS.
Further, Table 3, Panel C presents planned contrasts, similar to the
tests for H1a and H1b, for FAIRNESS, which show participants in the
equity disclosed condition perceive the company’s policies to be
significantly fairer than those in the gap disclosed condition or the
no gender pay disclosed condition (p < 0.001). Table 3, Panel C also
shows participants in the no gender pay disclosed condition
perceive the company’s policies to be fairer than those in the gap
disclosed condition (p < 0.001).19
4.3.2. Economic consequences
As displayed in Table 4, Panel A, we measure ECONOMIC CON-
SEQUENCES with six items capturing participants’ perceptions
about how employees and consumers will respond to the
17
Furthermore, the post hoc tests presented in Table 2, Panel D indicate that
participants in the equity disclosed condition are significantly more willing to
invest in a company than those in the gap disclosed condition (p ¼ 0.003, one-
tailed) and the no gender pay disclosed condition (p ¼ 0.050, one-tailed),
respectively.
18
Note that items A and B in Table 3, Panel A relate to distributive fairness and
items CeF relate to procedural fairness. However, we find that all six items load on
one factor. The results are qualitatively similar if we measure fairness with items A
and B only or items CeF only.
19
In addition, as shown in Table 3, Panel D, participants in the equity disclosed
condition perceive the company’s policies to be significantly fairer than those in the
gap disclosed condition (p < 0.001) and the no gender pay disclosed condition
(p ¼ 0.002), respectively.
C.R. Austin, D.D. Bobek and L.L. Harris Accounting, Organizations and Society xxx (xxxx) xxx

Table 2
Experiment 1.
Descriptive Statistics and test of Hypothesis 1a and 1b.

Panel A: Descriptive Statistics: mean (standard deviation); response scale for each item is 50 to þ50

Conditiona n Attractiveness Price Appreciation Likelihood to Invest WILLINGNESS TO INVEST

6 months 2 years $64.24 $70.58 $76.93

Gap Disclosed 99 19.33 (19.53) 17.03 (16.13) 17.90 (18.02) 17.27 (24.48) 8.73 (23.59) 1.75 (29.14) 13.67 (16.44)
No Gender Pay Disclosed 104 26.64 (10.35) 17.34 (13.69) 19.08 (14.36) 20.52 (19.07) 10.77 (18.69) 0.94 (24.23) 15.57 (11.59)
Equity Disclosed 106 29.19 (11.74) 20.78 (16.37) 23.68 (14.32) 25.89 (18.01) 14.78 (20.45) 3.08 (26.37) 19.57 (12.34)

Panel B: ANOVA- WILLINGNESS TO INVEST

Source DF Mean Square F-statistic p-valueb

GENDER PAY INFORMATION 2 935.94 5.09 0.007

Error 306 184.00

Panel C: Planned Contrasts e WILLINGNESS TO INVEST

Conditions Difference DF t-statistic p-valueb

H1a: Equity Disclosed versus Gap Disclosed and No Gender Pay Disclosed 4.94 306 3.17 0.001
H1b: No Gender Pay Disclosed versus Gap Disclosed 1.90 306 0.95 0.345

Panel D: Post Hoc Testing e WILLINGNESS TO INVEST

Conditions Difference DF t-statistic p-valueb

H1a: Equity Disclosed versus Gap Disclosed 5.90 203 2.92 0.003
H1a: Equity Disclosed versus No Gender Pay Disclosed 4.00 208 2.42 0.050

Notes:
a
See Appendix 1 for the text of the conditions. WILLINGNESS TO INVEST is the average of the six items in Panel A, each with a range of 50 to þ50. These items are also
displayed in Appendix 2, Panels AeC.
b
Two-tailed p-value (one-tailed if bold). Panel D p-values are computed using Bonferroni correction for multiple comparisons.

compensation information about ABC Inc. (i.e., the gender pay in-
formation manipulation).20 Reliability analysis for the six items
reveals a Cronbach’s alpha of 0.729, and the factor analysis indicates
the six items load on two factors. Factor 1 (2) has an eigenvalue of
2.67 (1.42). The two reverse scored items, items A and C from
Table 4, Panel A load on Factor 2; the two factors are significantly
correlated (correlation coefficient of 0.480). Results are inferentially
identical whether we use all six items, the Factor 1 items, or the
Factor 2 items as the measure of ECONOMIC CONSEQUENCES in the
analyses. Thus, since the Cronbach’s alpha using all six items is
acceptable, we measure ECONOMIC CONSEQUENCES as the average
of the six items. Table 4, Panel A also provides means and standard
deviations for ECONOMIC CONSEQUENCES by condition.
The ANOVA displayed in Table 4, Panel B reveals a significant
main effect of GENDER PAY INFORMATION (p < 0.001) on ECO-
NOMIC CONSEQUENCES. Further, Table 4, Panel C presents planned
contrasts that show results similar to those for FAIRNESS. Specif-
ically, when compared to the gap disclosed or no gender pay dis-
closed conditions, the mean of ECONOMIC CONSEQUENCES in
equity disclosed condition indicates participants anticipate signif-
icantly more favorable economic consequences (p < 0.001).
Furthermore, ECONOMIC CONSEQUENCES in the gap disclosed
condition is significantly lower than in the no gender pay disclosed
20
These items were self-developed. Specifically, drawing on the potential eco-
nomic consequences identified in prior research (e.g., Hales, et al., 2016; Grosser &
Moon, 2019) and anecdotal evidence of employees’ and customers’ reactions, we
created a list of possible economic consequences. We then consulted other ac-
counting researchers and lay-people to make sure we had not omitted any potential
consequences. We validated the initial list of items in a pilot test and eliminated
items that did not load on any one factor at 0.60 or higher (e.g., one item we
eliminated was “Qualified female employees will be able to negotiate higher sal-
aries.”). See Table 4 for more information on this scale. We do not include in eco-
nomic consequences predictions about investor reactions because investor
reactions are inherently part of the primary dependent variable, WILLINGNESS TO
INVEST.
condition (p < 0.001).21
4.3.3. Mediation test of H2
We test H2 using Process (Preacher & Hayes, 2004) with 5000
bias-corrected bootstrapping resamples to create a distribution of
estimates of the indirect effects. We rely on Hayes Model 6 because
it provides indirect effect statistics for both mediators individually
and also provides indirect effect statistics for the sequential
mediation from GENDER PAY INFORMATION to FAIRNESS to ECO-
NOMIC CONSEQUENCES to WILLINGNESS TO INVEST. H2a and H2b
predict both FAIRNESS and ECONOMIC CONSEQUENCES mediate
the relationship between GENDER PAY INFORMATION and WILL-
INGNESS TO INVEST. However, we acknowledge in our discussion
and in Fig. 1, that FAIRNESS may also influence WILLINGNESS TO
INVEST through ECONOMIC CONSEQUENCES. Thus, in Fig. 2 we
report results for all three indirect paths between GENDER PAY
INFORMATION and WILLINGNESS TO INVEST. Fig. 2, Panel A reports
the mediation analysis associated with the test of H1a (i.e., GENDER
PAY INFORMATION in Panel A is comparing the equity disclosed
condition to the other two conditions). Fig. 2, Panel B displays the
mediation analysis associated with the test of H1b (i.e., GENDER
PAY INFORMATION in Panel B is comparing the gap disclosed
condition to the no gender pay disclosed condition).
The results in Fig. 2, Panels A and B show a significant sequential
mediation from GENDER PAY INFORMATION to FAIRNESS to ECO-
NOMIC CONSEQUENCES to WILLINGNESS TO INVEST. The pattern of
results indicates that gender pay information influences fairness
21
Post hoc tests displayed in Table 4, Panel D also indicate that ECONOMIC
CONSEQUENCES are perceived as more favorable in the equity disclosed condition
compared to both the gap disclosed condition (p < 0.001) and the no gender pay
disclosed condition (p < 0.001). Further, if we use factor scores as opposed to the
average of the items measuring WILLINGNESS TO INVEST, FAIRNESS, and ECO-
NOMIC CONSEQUENCES, the results are inferentially and statistically equivalent to
the reported results.

9
C.R. Austin, D.D. Bobek and L.L. Harris Accounting, Organizations and Society xxx (xxxx) xxx

Table 3
Experiment 1
FAIRNESS.

Panel A: Descriptive Statistics for FAIRNESS (6-items, Cronbach’s alpha 0.93)

A. The compensation of ABC Company’s employees is fair.

B. The compensation of ABC Company’s employees is justified.
C. The policies are applied consistently.
D. The policies are unfair. (R)
E. The policies uphold ethical and moral standards.
F. The policies are free of bias.
FAIRNESS is the average of six items (items evaluated on a 7-point Likert scale with 1 ¼ strongly disagree and 7 ¼ strongly agree; instructions above items CeF state “Based
on the compensation information about ABC, Inc. provided in this case, what do you think about ABC, Inc.’s compensation policies?” Item D is reverse coded.)

Conditiona n Mean (standard deviation)

Gap Disclosed 99 3.80 (1.51)

No Gender Pay Disclosed 104 4.89 (0.89)
Equity Disclosed 106 5.44 (1.07)

Panel B: ANOVA- FAIRNESS

Source DF Mean Square F-statistic p-value

GENDER PAY INFORMATION 2 71.18 51.09 <0.001

Error 306 1.39

Panel C: Planned Contrasts e FAIRNESS

Conditions Difference DF t-statistic p-value

Equity Disclosed versus Gap Disclosed and No Gender Pay Disclosed 1.10 306 7.76 <0.001
No Gender Pay Disclosed versus Gap Disclosed 1.09 306 6.59 <0.001

Panel D: Post Hoc Testing e FAIRNESS

Conditions Difference DF t-statistic p-valueb

Equity Disclosed versus Gap Disclosed 1.64 203 9.02 <0.001

Equity Disclosed versus No Gender Pay Disclosed 0.55 208 4.07 0.002

Notes:
a
See Appendix 1 for the text of the conditions. Panel A includes the six items used to measure FAIRNESS.
b
Two-tailed p-value using Bonferroni correction for multiple comparisons.

perceptions directly and anticipated economic consequences indi-
rectly, through fairness. Thus, participants anticipate positive
(negative) economic consequences as a result of the perceived
fairness (unfairness) of gender pay equity (a gender pay gap).
Further, only ECONOMIC CONSEQUENCES has a direct effect on
WILLINGNESS TO INVEST. These results are consistent with the
instrumental perspective of CSR activities and suggest participants
view gender pay equity as “good for business”.22
In addition, the results in Fig. 2, Panel B comparing the gap dis-
closed condition to the no gender pay disclosed condition, while
generally consistent with Panel A with respect to the mediation
analysis, indicate an overall insignificant total effect of GENDER PAY
INFORMATION on WILLINGNESS TO INVEST. The total effect is insig-
nificant because the positive indirect effect of the sequential
22
In untabulated analyses we omit ECONOMIC CONSEQUENCES from the model
to be consistent with prior research. We find, when ECONOMIC CONSEQUENCES is
not in the model, there is a significant indirect effect of GENDER PAY INFORMATION
on WILLINGNESS TO INVEST through FAIRNESS (p < 0.01, model [error] df ¼ 2
[306]). In addition, in untabulated analyses we repeat the test reported in Fig. 2,
Panel A using structural equation modeling (SEM). After allowing for covariance
between some of the error terms of the indicator variables, the model statistics
indicate reasonably acceptable fit (e.g., TLI ¼ 0.891, CFI ¼ 0.913, and
RMSEA ¼ 0.085). The path coefficients and p-values are very similar to those re-
ported in Fig. 2, Panel A, with the exception that the path from FAIRNESS to
WILLINGNESS TO INVEST is marginally significant (p ¼ 0.062).
23
Based on the coding of the manipulation, a negative direct effect is consistent
with the disclosure of gender pay information, even though the information reveals
a gender pay gap, reducing information uncertainty and the reduction of infor-
mation uncertainty being valued by investors (Foster, 2003). However, the lack of
significance of the negative effect suggests we cannot draw definitive conclusions.
We leave this matter to future research.
10
mediation is offset by a negative, albeit insignificant, direct effect
(b ¼ 1.600, p ¼ 0.109).23 As such, the results of the mediation ana-
lyses are consistent with the ANOVA results reported in Tables 2e4.
4.4. Supplemental analyses
We perform several supplemental analyses to ensure the
robustness of the results and to provide additional insight into
individuals’ perceptions of the gender pay gap.
4.4.1. Robustness test of WILLINGNESS TO INVEST measure
Since the dependent variable, WILLINGNESS TO INVEST, includes
six items, in untabulated analyses we reran the analyses reported in
Table 2 and Fig. 2 for each item separately. The results for four of the
six items are inferentially identical to the reported results with
WILLINGNESS TO INVEST, the composite measure, as the dependent
variable. The results for the other two items, likelihood to invest at the
two higher prices, are slightly different. Likelihood to invest at $70.58
is significantly higher (p ¼ 0.046) in the equity disclosed condition
compared to the other two conditions, consistent with H1a; and is not
significantly different (p ¼ 0.488) between the gap disclosed and no
gender pay disclosed conditions, supporting H1b. However, while the
pattern of the mediation analysis is similar to Fig. 2, none of the in-
direct effects are significant at p < 0.10. Regarding likelihood to invest
at $76.93, we find no significant differences between conditions (all
p > 0.10). This is not too surprising given that investors, in general, are
less likely to invest at a price that is, by design, near the upper end of
the company’s historical stock price trend (Goldman, Sosin, & Gatto,
1979; Sternberg & Lubart, 1992).
C.R. Austin, D.D. Bobek and L.L. Harris Accounting, Organizations and Society xxx (xxxx) xxx

Table 4
Experiment 1
ECONOMIC CONSEQUENCES.

Panel A: Descriptive statistics for ECONOMIC CONSEQUENCES (6-items, Cronbach’s alpha 0.729)

A. Consumers will be less likely to purchase ABC Inc.’s products and/or services in the future. (R)
B. Consumers will be more likely to seek out ABC Inc.’s products and/or services in the future.
C. Qualified female job candidates will be discouraged from applying for employment at ABC Inc. (R)
D. Qualified female job candidates will be more likely to seek out employment at ABC Inc. Corporation.
E. Male employees of ABC Inc. will increase productivity in the future.
F. Female employees of ABC Inc. will increase productivity in the future.
Instructions above these items stated: “Based on the compensation information about ABC Inc. provided in this case, please indicate your level of agreement with each of
the following statements.”
ECONOMIC CONSEQUENCES is the average of six items (items evaluated on a 7-point Likert scale with 1 ¼ strongly disagree and 7 ¼ strongly agree; items A and C are
reverse coded.)

Conditiona n Mean (standard deviation)

Gap Disclosed 99 4.08 (1.05)

No Gender Pay Disclosed 104 4.75 (0.69)
Equity Disclosed 106 5.04 (0.77)

Panel B: ANOVA- ECONOMIC CONSEQUENCES

Source DF Mean Square F-statistic p-value

GENDER PAY INFORMATION 2 24.40 34.00 <0.001

Error 306 0.72

Panel C: Planned Contrasts e ECONOMIC CONSEQUENCES

Conditions Difference DF t-statistic p-value

Equity Disclosed versus Gap Disclosed and No Gender Pay Disclosed 1.10 306 7.76 <0.001
No Gender Pay Disclosed versus Gap Disclosed 1.09 306 6.59 <0.001
Panel D: Post Hoc Testing e ECONOMIC CONSEQUENCES

Conditions Difference DF t-statistic p-valueb

Equity Disclosed versus Gap Disclosed 0.95 205 7.46 <0.001

Equity Disclosed versus No Gender Pay Disclosed 0.29 208 2.92 0.037

Notes:
a
See Appendix 1 for the text of the conditions. Panel A includes the six items used to measure ECONOMIC CONSEQUENCES.
b
Two-tailed p-value using Bonferroni correction for multiple comparisons.

4.4.2. Demographic characteristics 4.4.3. Perceptions of actual pay gap

We also investigate whether any demographic characteristics
(e.g., gender, age, income, marital status, education, investment
intentions, etc.) are correlated with participants’ judgments. Only
three characteristics are significantly correlated with WILLINGNESS
TO INVEST, all related to investment experience. Whether partici-
pants have ever taken a financial statement analysis course, their
investment experience, and their experience in financial statement
analysis are all negatively correlated with WILLINGNESS TO INVEST.
In addition, planning to invest in the future and being more
educated are negatively correlated with ECONOMIC CONSE-
QUENCES. Finally, females’ overall FAIRNESS judgments are lower
than males. However, if any of these variables are included as
covariates or moderators, the results and inferences of the hy-
potheses testing are unchanged.24
24
Of the dependent and process variables, participants’ gender is only signifi-
cantly correlated with FAIRNESS (p ¼ 0.009, untabulated), although the correlation
coefficient indicates only a modest amount of correlation (r ¼ - 0.149, untabulated).
Nevertheless, since gender plays a prominent role in this study, in untabulated
analyses we re-ran the analyses reported in Tables 2e4, including gender as another
between-participant factor. Gender is a significant predictor of FAIRNESS; however,
the interaction between the gender pay manipulation and participants’ gender is
not significant in any of these ANOVAs (all p > 0.10). Females do judge the
compensation polices of the company as less fair than males. However, if gender is
included as a covariate in the mediation analyses, while it is a significant predictor
of FAIRNESS, the results are unchanged from those reported in Fig. 2. We also es-
timate independent-samples median tests as well as a Welch test because a Levene
test reveals unequal variances. Results of the median tests and the Welch test are
inferentially identical to those reported in Tables 2e4.
We also collect data related to participants’ perceptions of the
actual pay gap existing in the US. These items were collected as
post-experimental questions. Participants were first asked to esti-
mate how much they believe females make compared to males in
the US; this variable is labeled PAY GAP BELIEF. Next, participants
were presented with actual BLS data indicating females make 19
percent less than males. They are then asked how much of this 19
percent they believe is due to gender discrimination; this variable is
labeled CENTS. Participants are also provided with a number of
possible explanations, including gender discrimination, as to why
this pay gap exists and indicate the extent of their agreement or
disagreement regarding each explanation. The results for these
items are displayed in Table 5, Panels A, B, and C; and the means are
reported separately for male and female participants.
As shown in Table 5, Panel A, participants’ mean beliefs about the
pay gap are similar to the commonly cited gender pay gap in the US;
and the means for PAY GAP BELIEF are not different across experi-
mental conditions (untabulated). In Section 4.4.4 we examine
whether PAY GAP BELIEF influences how participants perceive the
experimental manipulation. Table 5, Panel B reports responses to PAY
GAP BELIEF by tercile and indicates about a third of participants
believe females get paid between $0.78 and $0.85 for each dollar a
male is paid. The mean for this group is $0.81, which is equivalent to
the actual pay gap in the US. Untabulated one-sample t-tests indicate
the means for PAY GAP BELIEF for both the small and large gap terciles
are significantly different than the actual pay gap of $0.81 (both
p < 0.01). Table 5, Panel A (B) also reports the mean (tercile break-
down) for CENTS; on average, participants attribute a little over half of
the pay gap, 10.82 of the possible 19 percentage points, to
discrimination.

11
C.R. Austin, D.D. Bobek and L.L. Harris Accounting, Organizations and Society xxx (xxxx) xxx

Fig. 2. Test of H2: Experiment 1.

Panel A: Equity disclosed condition compared to gap disclosed and no gender pay disclosed conditions.
Fig. 2, Panel A presents a mediation analysis using Hayes Model 6, with participants in Experiment 1, to test H2a and H2b. GENDER PAY INFORMATION is the manipulated variable
and is equal to 1 (1) for those in the equity disclosed (gap disclosed and no gender pay disclosed) condition. FAIRNESS is participants’ perceptions of the fairness of the company’s
compensation policies (see Table 3); ECONOMIC CONSEQUENCES is participants’ anticipated economic consequences of the company’s compensation policies (see Table 4); and
WILLINGNESS TO INVEST is participants’ overall willingness to invest in the company (see Table 2). Higher values for FAIRNESS, ECONOMIC CONSEQUENCES, and WILLINGNESS TO
INVEST indicate more favorable perceptions.
H2a (H2b) predicts FAIRNESS (ECONOMIC CONSEQUENCES) will mediate the effect of the gender pay information on WILLINGNESS TO INVEST. Hayes Model 6 reports three indirect
paths; the indirect path that directly tests H2a (H2b) is insignificant: b ¼ 0.62, 95% CI [-0.28, 1.61] (b ¼ 0.13, 95% CI [-0.15, 0.53]); however, the sequential mediation path from
GENDER PAY INFORMATION to FAIRNESS to ECONOMIC CONSEQUENCES to WILLINGNESS TO INVEST is reported above and is significant; this is also evidence consistent with H2a
and H2b.
b’s represents coefficients. Model F-statistic is 15.12, p < 0.001, R2 ¼ 0.129, model (error) df ¼ 3 (305).
Panel B: No gender pay disclosed condition compared to gap disclosed condition.
Fig. 2, Panel B presents a mediation analysis using Hayes Model 6, with participants in Experiment 1, to test H2a and H2b. GENDER PAY INFORMATION is the manipulated variable

12
C.R. Austin, D.D. Bobek and L.L. Harris Accounting, Organizations and Society xxx (xxxx) xxx

and is equal to 1 (-1) for those in the no gender pay disclosed (gap disclosed) condition. FAIRNESS is participants’ perceptions of the fairness of the company’s compensation policies
(see Table 3); ECONOMIC CONSEQUENCES is participants’ anticipated economic consequences of the company’s compensation policies (see Table 4); and WILLINGNESS TO INVEST is
participants’ overall willingness to invest in the company (see Table 2). Higher values for FAIRNESS, ECONOMIC CONSEQUENCES, and WILLINGNESS TO INVEST indicate more
favorable perceptions.
H2a (H2b) predicts FAIRNESS (ECONOMIC CONSEQUENCES) will mediate the effect of the gender pay information on WILLINGNESS TO INVEST. Hayes Model 6 reports three indirect
paths; the indirect path that directly tests H2a (H2b) is insignificant: b ¼ 0.94, 95% CI [-0.16, 2.25] (b ¼ 0.28, 95% CI [-0.20, 0.81]), however the sequential mediation path from
GENDER PAY INFORMATION to FAIRNESS to ECONOMIC CONSEQUENCES to WILLINGNESS TO INVEST is reported above and is significant; this is also evidence consistent with H2a
and H2b.
b’s represents coefficients. Model F-statistic is 14.78, p < 0.001, R2 ¼ 0.182, model (error) df ¼ 3 (199).

Table 5, Panel C reports participants’ level of agreement with 13
possible reasons for why the pay gap exists. We perform factor
analysis on the responses and the items load on three interpretable
factors. The six items loading on Factor 1 represent explanations that
can be described as “males are better” (e.g., males are more pro-
ductive than females). On average, both male and female participants
disagree with these statements, as all but two of the means are
significantly below the scale midpoint (all p < 0.05). The five items
loading on Factor 2 can be described as “females make different
choices than males” (e.g., females are more likely to work in lower
paid fields). Participants on average agree with these statements as
the means are all significantly greater than the midpoint of the scale.
Factor 3 includes two items reflecting discrimination (i.e., “females
face discrimination in the workplace”, and “males are more likely to
be promoted than equally qualified females”). Interestingly, while
both male and female participants agree with these two statements,
female participants agree more strongly that females face discrimi-
nation in the workplace (p < 0.05).
In sum, participants appear to attribute the actual pay gap to a
combination of gender discrimination and different choices made
by females and males (e.g., taking time away from work to care for
family members). Further, participants disagree with statements
reflecting males are paid more because they are “better” (e.g., work
harder or are more educated). While the valence of male and fe-
male participants’ opinions is similar, they do appear to disagree
somewhat with respect to the extent of their agreement or
disagreement with the various statements. These responses pro-
vide insight to researchers, regulators, and company management.
They suggest that while there are some reasonable explanations for
why a gender pay gap exists, absent evidence to the contrary, in-
dividuals will likely also assume a pay gap is partially due to
discrimination.
To further explore whether participants’ expectations/beliefs
about the actual pay gap affect the results, we also ran ANOVAs and
planned contrasts for each tercile of PAY GAP BELIEF for WILLING-
NESS TO INVEST, FAIRNESS, and ECONOMIC CONSEQUENCES. The
results, reported in Table 6, Panels CeE, are largely consistent with
the results for the full sample with a few exceptions. The first
exception is for those in the small gap tercile; there is no difference
in their responses to ECONOMIC CONSEQUENCES between the
equity disclosed condition and the other two conditions (t-
statistic ¼ 0.02, p ¼ 0.983). In addition, while not statistically
significantly different, the mean of 18.00 for the gap disclosed
condition is greater than the mean of 14.43 for the no gender pay
disclosed condition. This is directionally inconsistent with our
prediction in H1b and displays a different pattern of means
compared to the other two pay gap terciles (i.e., in the other two
terciles and for the full sample, the mean for the gap disclosed
condition is less than the mean for the no gender pay disclosed
condition). Digging deeper into the data reveals those who believe
the actual pay gap is small also believe less of the actual pay gap is
the result of discrimination.25 Thus, participants in the small gap
tercile likely do not react as negatively to the presence of a gender
pay gap as those in the other pay gap terciles because it is of less
concern to them.26 Second, the other result that is different from
the results for the full sample is for those in the large gap tercile.
Despite perceiving fairness and economic consequences consistent
with the results for the full sample, WILLINGNESS TO INVEST is not
statistically significantly different between conditions (F-
statistic ¼ 1.38, p ¼ 0.257).
5. Robustness tests
5.1. Experiment 2

4.4.4. Robustness test of pay gap beliefs by tercile
We also investigate whether participants’ beliefs about the
actual pay gap affect their judgments. Table 6, Panel A provides
means and standard deviations for WILLINGNESS TO INVEST,
FAIRNESS, and ECONOMIC CONSEQUENCES by PAY GAP BELIEF
TERCILE (i.e., small gap tercile, mid gap tercile, and large gap tercile,
corresponding to the data reported in Table 5, Panel B) for each
gender pay information condition. We perform 3 X 3 ANOVAs with
GENDER PAY INFORMATION and PAY GAP BELIEF TERCILE as the
independent variables and WILLINGNESS TO INVEST, FAIRNESS,
and ECONOMIC CONSEQUENCES as the dependent variable,
respectively. The ANOVA results are shown in Table 6, Panel B. We
find GENDER PAY INFORMATION significantly affects WILLINGNESS
TO INVEST (F-statistic ¼ 4.46, p ¼ 0.012), however neither PAY GAP
BELIEF TERCILE nor the interaction is significant (both F-statis-
tics < 2, both p > 0.290). The direct effect of GENDER PAY INFOR-
MATION is also significant for both FAIRNESS and ECONOMIC
CONSEQUENCES (both F-statistics > 34, both p ¼ 0.000), as is the
interaction (both F-statistics > 3, both p < 0.005); and the main
effect of PAY GAP BELIEF TERCILE is significant for FAIRNESS (F-
statistic ¼ 6.18, p ¼ 0.002), but not ECONOMIC CONSEQUENCES (F-
statistic 0.05, p ¼ 0.949).
To identify whether it is the gender pay information content or
the disclosure of the information by the company, or both, that
influences investors’ judgments, we conduct Experiment 2, a 3 X 2
between-participant experiment. We again vary GENDER PAY IN-
FORMATION at three levels: gap, equity, and no gender pay infor-
mation, identical to Experiment 1. We also manipulate the source of
the gender pay information, SOURCE; that is, participants either
receive the gender pay information from a company disclosure
identical to Experiment 1, the disclosed condition, or from a
“website that compiles user-information,” the revealed condition.
There are multiple websites, such as Glassdoor.com, which
currently compile similar information. Appendix 3 displays an
example of the source manipulation for the equity conditions. If
investors react differently to gender pay information when it is
25
Mean for CENTS, the amount of the actual pay gap attributable to discrimina-
tion, is 8.14 in the small gap tercile compared to 11.34 and 12.92 in the mid and
large gap terciles, respectively; F-statistic ¼ 19.55, p < 0.001.
26
Given the visual pattern of means by tercile we reran the test of H1b, excluding
participants in the small gap tercile. In this case the planned contrast comparing the
gap disclosed condition to the no gender pay disclosed condition is marginally
significantly different (mean of 11.69 versus 16.15, t-statistic ¼ 1.853, p ¼ 0.066).

13
C.R. Austin, D.D. Bobek and L.L. Harris Accounting, Organizations and Society xxx (xxxx) xxx

Table 5
Experiment 1
Supplemental analysis: Gender pay gap opinions.

Panel A: Pay Gap Beliefs

All Participants (n ¼ 309) Males (n ¼ 177) Females (n ¼ 132) Test of difference between genders
a
PAY GAP BELIEF t ¼ 3.44
$0.84 $0.87 $0.78 df ¼ 307
($0.24) ($0.24) ($0.22) p < 0.001
CENTSb t ¼ 3.50
10.82 9.82 12.14 df ¼ 307
(5.87) (6.05) (5.38) p ¼ 0.001

Panel B: Pay Gap/Discrimination Beliefs by Tercile

Small Gap Tercile/Low Cents Tercile Mid Gap Tercile/Mid Cents Tercile Large Gap Tercile/High Cents Tercile

PAY GAP BELIEFa

Range $0.86-$2.00 $0.78-$0.85 $0.10-$0.77
Mean (standard deviation) $1.04 (0.28) $0.81 (0.02) $0.65 (0.13)
N n ¼ 101 n ¼ 106 n ¼ 102
CENTSb
Range 0e8 9e14 15e19
Mean (standard deviation) 3.79 (2.58) 11.78 (1.69) 17.11 (1.59)
N n ¼ 106 n ¼ 100 N ¼ 103

Panel C: Explanations for why Pay Gap Existsc All Participants Males Females
(n ¼ 309) (n ¼ 177) (n ¼ 132)

Factor 1
Eigenvalue 5.299; 41% variance explained
Males are more productive than femalesd.. 3.09e 3.54 2.48
(1.84) (1.85) (1.63)
Males are paid more because they are responsible for supporting their families, whereas females choose to work. 3.10 3.36 2.74
(1.80) (1.88) (1.63)
Females have less education than males. 2.69 2.98 2.30
(1.67) (1.73) (1.50)
Males are better leaders than females. 3.30 3.77 2.66
(1.89) (1.92) (1.65)
Males work more overtime and weekends than females.f 4.05 4.42 3.56
(1.84) (1.81) (1.78)
Males are better at negotiating their salaries.f 4.07 4.27 3.81
(1.78) (1.71) (1.85)
Factor 2
Eigenvalue 1.822; 14% variance explained
Females are more likely to work in lower paid fields (for example, education, social work, etc.). 4.81 4.94 4.64
(1.52) (1.48) (1.56)
Females are more likely to work in lower paid positions (for example, support positions like administrative assistants and 4.83 4.92 4.71
custodial workers). (1.46) (1.44) (1.49)
Females are more likely to take time away from work to take care of their families (having and/or raising children, 4.94 5.13 4.67
taking care of elderly relatives, etc.) than males. (1.62) (1.53) (1.71)
Females prefer flexible working hours or the ability to work from home over higher salaries. 4.35 4.47 4.17
(1.71) (1.65) (1.78)
Males are more likely than females to work on commission or have a larger percentage of their compensation tied to 4.26 4.53 3.89
performance bonuses.f (1.65) (1.56) (1.69)
Factor 3
Eigenvalue 1.463; 11% variance explained
Males are more likely to get promoted than equally qualified females. 4.93 4.80 5.11
(1.54) (1.56) (1.50)
Females face discrimination in the workplace. 5.07 4.80 5.44
(1.63) (1.73) (1.42)

Notes:
a
PAY GAP BELIEF is the range of responses for each tercile to “What do you believe is the gender pay gap throughout the United States of America? In the U.S.A. females make
____ for every $1.00 males make.” Note that both the small gap and large gap terciles have a few unreasonable responses (i.e., of the 101 [102] participants in the small gap[large
gap] tercile, 9 [7] responded that females make $1.50 or more [0.40 or less] for every $1.00 males make).
b
CENTS is the range of responses for each tercile to “Please indicate on the scale below how much of this 19 percent pay gap (in percentage points) you believe is related to
discrimination.” The responses are on a sliding scale from zero to 19. [Note they respond to this question after reading about the BLS statistics (see Panel C explanation)].
c
Participants read the following information:
The Bureau of Labor Statistics (BLS) reports there is a “gender pay gap” in the United States of America. Using data from its annual Current Population Survey, BLS shows that
females made $0.81 for every $1.00 males make; or stated another way, females make 19 percent less than males. [Note: there was a link to the BLS they could access] There
are a number of things that could contribute to the 19 percent pay gap. Please indicate your level of agreement with each of the following statements as an explanation for why
this gap exists.
Responses are on a 7-point Likert scale with higher numbers indicating greater agreement.
d
Bold text indicates significant difference between males and females at p < 0.05 (two-tailed, df ¼ 307).
e
Cell entries are means (standard deviation). Note, all means in the “all participants” column are significantly different than the midpoint at p < 0.05 (two-tailed, df ¼ 308)
except for “Males work more overtime and weekends than females” and “males are better at negotiating their salaries.”
f
items did not load cleanly on any one factor on any one factor (factor loading < 0.600); they are included in the table with the factor for which they had the highest loading.

14
C.R. Austin, D.D. Bobek and L.L. Harris Accounting, Organizations and Society xxx (xxxx) xxx

Table 6
Experiment 1.

Supplemental Analysis: PAY GAP BELIEF by Tercilea

Panel A: Descriptive Statistics: mean (standard deviation)

GENDER PAY INFORMATION Conditionb WILLINGNESS TO INVEST (range 50 to þ50) FAIRNESS (range 1e7) ECONOMIC CONSEQUENCES (range 1e7)

Gap Disclosed
Small gap tercile (n ¼ 31) 18.00 (15.86) 4.57 (1.29) 4.40 (1.03)
Mid gap tercile (n ¼ 30) 11.42 (16.98) 3.54 (1.50) 3.78 (1.02)
Large gap tercile (n ¼ 38) 11.90 (16.20) 3.37 (1.49) 4.07 (1.05)
No Gender Pay Disclosed
Small gap tercile (n ¼ 35) 14.43 (12.47) 5.12 (0.68) 4.87 (0.62)
Mid gap tercile (n ¼ 34) 15.85 (11.10) 4.97 (0.92) 4.77 (0.76)
Large gap tercile (n ¼ 35) 16.43 (11.41) 4.58 (0.88) 4.61 (0.67)
Equity Disclosed
Small gap tercile (n ¼ 35) 20.70 (13.75) 5.27 (1.07) 4.62 (0.79)
Mid gap tercile (n ¼ 42) 20.53 (10.41) 5.68 (1.06) 5.33 (0.67)
Large gap tercile (n ¼ 29) 16.89 (13.10) 5.44 (1.07) 5.11 (0.67)

Panel B: ANOVAs with GENDER PAY INFORMATION and PAY GAP BELIEF TERCILE

Source WILLINGNESS TO INVEST FAIRNESS ECONOMIC CONSEQUENCES

DF Mean F- p- Mean F- p- Mean F- p-

Square statistic value Square statistic value Square statistic value

GENDER PAY INFORMATION 2 819.15 4.46 0.012 65.80 50.66 0.000 23.50 34.74 0.000
PAY GAP BELIEF TERCILE 2 185.82 1.01 0.365 8.03 6.18 0.002 0.04 0.05 0.949
INTERACTION 4 229.09 1.25 0.291 5.12 3.94 0.004 4.10 6.06 0.000
Error 300 183.57 1.30 0.68

Panel C: ANOVAs and Planned Contrasts for small gap tercile only

Source DF Mean F- p- Mean F- p- Mean F- p-

Square statistic value Square statistic value Square statistic value

GENDER PAY INFORMATION 2 346.23 1.76 0.177 4.36 4.06 0.020 1.81 2.68 0.074
Error 100 196.55 1.08 0.68

Source DF Difference t- p- Difference t- p- Difference t- p-

statistic value statistic value statistic value

H1a: Equity Disclosed versus Gap Disclosed and No Gender Pay 98 4.48 1.53 0.065*c 0.42 1.95 0.055 0.00 0.02 0.983
Disclosed
H1b: No Gender Pay Disclosed versus Gap Disclosed 98 3.58 1.03 0.303 0.55 2.15 0.034 0.47 2.31 0.023

Panel D: ANOVAs and Planned Contrasts for mid gap tercile only

Source DF Mean F- p- Mean F- p- Mean F- p-

Square statistic value Square statistic value Square statistic value

GENDER PAY INFORMATION 2 735.11 4.49 0.014 40.45 29.98 <0.001 21.09 31.96 <0.001
Error 103 163.76 1.35 0.66

Source DF Difference t- p- Difference t- p- Difference t- p-

statistic value statistic value statistic value

H1a: Equity Disclosed versus Gap Disclosed and No Gender Pay 103 6.89 2.71 0.004* 1.42 6.17 <0.001 1.06 6.56 <0.001
Disclosed
H1b: No Gender Pay Disclosed versus Gap Disclosed 103 4.43 1.38 0.170 1.43 4.92 <0.001 0.98 4.82 <0.001

Panel E: ANOVAs and Planned Contrasts for large gap tercile only

Source DF Mean F- p- Mean F- p- Mean F- p-

Square statistic value Square statistic value Square statistic value

GENDER PAY INFORMATION 2 263.63 1.38 0.257 32.44 22.10 <0.001 9.15 13.17 <0.001
Error 99 191.33 1.47 0.69

Source DF Difference t- p- Difference t- p- Difference t- p-

statistic value statistic value statistic value

H1a: Equity Disclosed versus Gap Disclosed and No Gender Pay 99 2.63 0.87 0.194* 1.33 5.01 <0.001 0.78 4.25 <0.001
Disclosed
H1b: No Gender Pay Disclosed versus Gap Disclosed 99 4.52 1.40 0.166 1.21 4.26 <0.001 0.54 2.78 0.006
a
PAY GAP BELIEF is the range of responses for each tercile to “hat do you believe is the gender pay gap throughout the United States of America? In the U.S.A. females make
_____ for every $1.00 males make.” See Table 5, Panel B.
b
See Appendix 1 for the text of the gender pay information conditions and Tables 2, 3, and 4 for descriptions of WILLINGNESS TO INVEST, FAIRNESS, and ECONOMIC
CONSEQUENCES, respectively.
c
*indicates one-tailed p-value.

15
C.R. Austin, D.D. Bobek and L.L. Harris Accounting, Organizations and Society xxx (xxxx) xxx

Table 7
Experiment 2
Investigation of information source.

Panel A: Descriptive Statistics: mean (standard deviation)

Conditiona WILLINGNESS TO INVEST FAIRNESS ECONOMIC CONSEQUENCES

(range 50 to þ50) (range 1e7) (range 1e7)

Disclosed Revealed Disclosed Revealed Disclosed Revealed

Gap
Disclosed n ¼ 77 11.53 12.00 3.35 3.80 4.11 4.40
Revealed n ¼ 72 (15.78) (17.34) (1.26) (1.54) (0.75) (0.90)
No Gender Pay Information
Disclosed n ¼ 69 15.19 13.74 4.82 4.73 4.75 4.58
Revealed n ¼ 69 (15.02) (15.26) (1.08) (0.86) (0.68) (0.79)
Equity
Disclosed n ¼ 72 16.33 18.07 5.27 5.29 4.96 4.92
Revealed n ¼ 72 (12.51) (12.75) (1.09) (1.11) (0.83) (0.80)

Panel B: ANOVAs
WILLINGNESS TO INVEST

Source DF Mean Square F-statistic p-value

GENDER PAY INFORMATION 2 1082.84 4.89 0.008

SOURCE 1 6.97 0.03 0.859
GENDER PAY INFORMATION*SOURCE 2 90.25 0.41 0.666
Error 425 221.47

FAIRNESS
Source DF Mean Square F-statistic p-value

GENDER PAY INFORMATION 2 112.66 81.20 0.000

SOURCE 1 1.72 1.24 0.266
GENDER PAY INFORMATION*SOURCE 2 3.02 2.17 0.115
Error 425 1.39

ECONOMIC CONSEQUENCES
Source DF Mean Square F-statistic p-value
GENDER PAY INFORMATION 2 17.52 27.72 0.000
SOURCE 1 0.10 0.16 0.685
GENDER PAY INFORMATION*SOURCE 2 1.98 3.12 0.045
Error 425 0.63

Panel C: Planned Contrasts

WILLINGNESS TO INVEST

Conditions Difference DF t-statistic p-valueb

H1a: Equity versus Gap and No Gender Pay Information 4.09 428 2.70 0.003
H1b: No Gender Pay Information versus Gap 2.71 428 1.55 0.123

FAIRNESS

Conditions Difference DF t-statistic p-valueb

H1a: Equity versus Gap and No Gender Pay Information 1.11 428 9.20 0.000
H1b: No Gender Pay Information versus Gap 1.21 428 8.65 0.000

ECONOMIC CONSEQUENCES

Conditions Difference DF t-statistic p-valueb

H1a: Equity versus Gap and No Gender Pay Information 0.48 428 5.92 0.000
H1b: No Gender Pay Information versus Gap 0.42 428 4.43 0.000

Notes:
This table displays the results of Experiment 2. This experiment is similar to Experiment 1 except we also manipulate the source of the information, SOURCE; the gender pay
information is disclosed by the firm, disclosed condition, or compiled by a third-party website, revealed condition. Details about this procedure are described in Section 5.1.
Appendix 3 displays this manipulation. Panel A reports descriptive statistics, Panel B reports the results of the ANOVA, Panel C reports the test of H1a and H1b, collapsing across
SOURCE, as a replication of Experiment 1 results.
a
See Appendix 1 for the text of the gender pay information conditions and Tables 2e4 for descriptions of WILLINGNESS TO INVEST, FAIRNESS, and ECONOMIC CONSEQUENCES,
respectively.
b
Two-tailed p-value (one-tailed if bold).

16
C.R. Austin, D.D. Bobek and L.L. Harris
presented as a company disclosure vs. being from a third-party
website it would indicate that the act of disclosure by the com-
pany in addition to the content of the information influences their
judgments. If, however, investors do not react differently when
gender pay information is from a company disclosure or a third-
party website, then it would indicate that it is the information
content rather than the act of disclosure by the company that in-
fluences their judgments.
We again solicit a sample from MTurk using the same screening
criteria as Experiment 1. The sample includes 431 participants who
meet the screening criteria.27 We included manipulation check
items for both the gender pay and source manipulations; 77% (62%)
correctly identified the gender pay (source) manipulation. We
include all 431 in the analyses reported in Table 7; results with only
those participants who correctly responded to the manipulation
checks are inferentially identical. The demographic characteristics
are similar to Experiment 1.
We conduct three 3 X 2 ANOVAs with GENDER PAY INFORMA-
TION and SOURCE as the independent variables and WILLINGNESS
TO INVEST, FAIRNESS, and ECONOMIC CONSEQUENCES as the
dependent variable, respectively. The ANOVA results are shown in
Table 7, Panel B. We find no evidence that either SOURCE or the
interaction between SOURCE and GENDER PAY INFORMATION af-
fects WILLINGNESS TO INVEST (p > 0.10). Similarly, we find that
neither SOURCE nor the interaction of SOURCE and GENDER PAY
INFORMATION significantly affects FAIRNESS (p > 0.10). Finally,
regarding ECONOMIC CONSEQUENCES, there is no SOURCE main
effect (p > 0.10), however there is a significant interaction of SOURCE
and GENDER PAY INFORMATION (p ¼ 0.05). We also ensure that the
mediation analyses results are robust regardless of the source of the
gender pay information by conducting the mediation analyses
separately for the revealed and disclosed conditions (untabulated).
The results for both the revealed and disclosed conditions are
inferentially identical to Experiment 1. Overall, these results are
consistent with the notion that it is the information content of the
gender pay information, not the fact that it was disclosed by the
company, that influences investors’ judgments. In addition to this
intended purpose of Experiment 2, the findings in this experiment
also serve as a replication of the Experiment 1 results. As shown in
Table 7, Panel C, which displays the results of H1a and H1b hy-
potheses testing that collapses across SOURCE conditions, Experi-
ment 2 replicates Experiment 1 results.
5.2. Experiment 3
We also investigate whether investors’ reactions to gender pay
information are intentional or unintentional following the methods
used by Elliott et al. (2014). Elliott et al. (2014) find that when par-
ticipants explicitly assess the CSR activities of a company prior to
providing their investment assessment, the manipulation of CSR in-
formation does not influence willingness to invest. However, if par-
ticipants do not explicitly assess the CSR activities, their investment
judgments are influenced by the CSR information. Elliott et al. (2014)
conclude that positive affect (i.e., a positive emotional response)
generated by positive CSR unintentionally influences participants’
investment judgments (i.e., they use “affect as information”).
Thus, to determine if the influence of GENDER PAY INFORMA-
TION on WILLINGNESS TO INVEST is intentional or unintentional,
we conduct Experiment 3, a 3 X 4 between-participant experiment.
We continue to manipulate GENDER PAY INFORMATION at three
27
A total of 475 participants completed the experiment; however similar to
Experiment 1, we removed 26 participants with duplicate IP addresses and 18 who
responded to the attention check incorrectly.
17
Accounting, Organizations and Society xxx (xxxx) xxx
levels as in Experiment 1: gap disclosed, equity disclosed, and no
gender pay disclosed. The second manipulation, ORDER, is the or-
der in which participants view and answer the items measuring the
dependent variable, WILLINGNESS TO INVEST, and the mediators,
FAIRNESS and ECONOMIC CONSEQUENCES. Because we have two
mediators, ORDER has 4 levels: the DVFirst condition is the same as
Experiment 1; in the DVLast condition we collect the fairness and
economic consequences items before the willingness to invest
items. Finally, in the FairDVEcon (EconDVFair) condition we collect
the fairness (economic consequences) items first, then the will-
ingness to invest items, and then the economic consequences
(fairness) items.28
We again solicit a sample from MTurk using the same screening
criteria as Experiment 1. The sample includes 669 participants with
similar demographic characteristics as Experiment 1.29 We
included a manipulation check item; 80% correctly identified the
gender pay manipulation. In the interest of parsimony, Table 8 only
includes the results for the DVFirst and DVLast conditions
(n ¼ 332); however, the results including the other two conditions
are similar. Further, the results are unchanged if we exclude those
who failed the manipulation check.
As shown in Table 8, we find no evidence that ORDER affects
WILLINGNESS TO INVEST, FAIRNESS, or ECONOMIC CONSE-
QUENCES (all p > 0.10). Similarly, we find no evidence that the
interaction of ORDER and GENDER PAY INFORMATION significantly
affects WILLINGNESS TO INVEST, FAIRNESS, or ECONOMIC CON-
SEQUENCES (all p > 0.10). We also ensure the mediation analyses
are robust regardless of the order the items are collected by con-
ducting the mediation analyses for the DVFirst and DVLast condi-
tions separately (untabulated). The results of the mediation
analyses are inferentially identical to Experiment 1 regardless of
ORDER. Thus, overall, we find no evidence the results are affected
by order. Further, participants were asked to what extent the
company’s compensation information influenced their responses
to the WILLINGNESS TO INVEST items.30 On average participants
reported they were moderately influenced by the compensation
information (mean 3.85, which corresponds to “moderately” on the
scale). In addition, we performed an untabulated ANOVA with
AWARENESS as the dependent variable and GENDER PAY INFOR-
MATION, ORDER, and the interaction as between-participant in-
dependent variables. Only GENDER PAY INFORMATION is
significant. Post-hoc tests indicate those in the equity disclosed
condition report being marginally significantly more influenced
28
In addition, in the DVFirst and DVLast conditions the order participants respond
to the economic consequences and fairness items is randomized. Following Elliott
et al. (2014), we also include eight items to measure participants’ affect about
ABC Inc.’s financial performance and compensation policies (e.g., “I was happy with
ABC Inc’s 2018 financial performance [compensation policies]”). While the re-
sponses to the affect items load on more than one factor, Cronbach’s alpha
including all eight items is 0.849; therefore, we use the average of the eight items to
create the variable AFFECT, which measures participants’ affective reactions to the
information presented about ABC, Inc. Responses are on a 7-point scale with higher
numbers indicating more positive AFFECT.
29
A total of 711 participants completed the experiment; however, similar to Ex-
periments 1 and 2 we removed 29 participants with duplicate IP addresses and 13
who responded to the attention check incorrectly.
30
We include three items to measure participants’ awareness of how ABC Inc.’s
compensation policies influenced their willingness to invest (i.e.., “To what extent
did ABC Inc’s compensation information influence your assessment of ABC’s
attractiveness as an investment [your prediction about ABC’s future stock price],
{your likelihood to invest in ABC Inc.”}). The responses are on a 7-point scale as
follows: not at all, very weakly, weakly, moderately, strongly, very strongly, and
completely. The responses to these three items load on one factor and the Cron-
bach’s alpha including all three items is 0.895; therefore, we use the average of the
three items to create the variable AWARENESS, which measures participants’
awareness of the extent to which ABC’s compensation influenced their willingness
to invest.
C.R. Austin, D.D. Bobek and L.L. Harris Accounting, Organizations and Society xxx (xxxx) xxx

Table 8
Experiment 3
Investigation of intentionality.

Panel A: Descriptive Statistics: mean (standard deviation)

Conditional WILLINGNESS TO INVEST FAIRNESS ECONOMIC CONSEQUENCES

(range 50 to þ50) (range 1e7) (range 1e7)

DVFirst DVLast DVFirst DVLast DVFirst DVLast

Gap Disclosed
DVFirst n ¼ 61 14.47 3.47 3.47 3.41 4.16 3.97
DVLast n ¼ 45 (13.68) (16.11) (1.50) (1.49) (0.97) (1.08)
No Gender Pay Disclosed
DVFirst n ¼ 51 13.73 13.63 4.88 4.92 4.83 4.83
DVLast n ¼ 57 (14.06) (18.64) (0.86) (1.21) (0.77) 3(0.93)
Equity Disclosed
DVFirst n ¼ 57 18.13 19.70 5.67 5.51 5.28 5.27
DVLast n ¼ 61 (11.76) (12.28) (0.93) (1.18) (0.69) (0.88)

Panel B: ANOVAs

WILLINGNESS TO INVEST

Source DF Mean Square F-statistic p-value

GENDER PAY INFORMATION 2 1001.36 4.73 0.009

ORDER 1 0.63 0.00 0.956
GENDER PAY INFORMATION*ORDER 2 54.47 0.26 0.773
Error 326 211.63

FAIRNESS
Source DF Mean Square F-statistic p-value

GENDER PAY INFORMATION 2 131.34 90.09 0.000

ORDER 1 0.29 0.20 0.653
GENDER PAY INFORMATION*ORDER 2 0.30 0.20 0.817
Error 326 1.46

ECONOMIC CONSEQUENCES
Source DF Mean Square F-statistic p-value

GENDER PAY INFORMATION 2 40.73 51.07 0.000

ORDER 1 0.36 0.45 0.501
GENDER PAY INFORMATION*ORDER 2 0.29 0.36 0.696
Error 326 0.80

Panel C: Planned Contrasts

WILLINGNESS TO INVEST
Conditions Difference DF t-statistic p-valueb

H1a: Equity Disclosed versus Gap Disclosed and No Gender Pay Disclosed 5.16 329 3.10 0.001
H1b: No Gender Pay Disclosed versus Gap Disclosed 0.09 329 0.05 0.960

FAIRNESS
Conditions Difference DF t-statistic p-valueb

H1a: Equity Disclosed versus Gap Disclosed and No Gender Pay Disclosed 1.43 329 10.35 0.000
H1b: No Gender Pay Disclosed versus Gap Disclosed 1.46 329 8.90 0.000

ECONOMIC CONSEQUENCES
Conditions Difference DF t-statistic p-valueb

H1a: Equity Disclosed versus Gap Disclosed and No Gender Pay Disclosed 0.83 329 8.17 0.000
H1b: No Gender Pay Disclosed versus Gap Disclosed 0.78 329 6.38 0.000

Notes: Table 8 displays the results of Experiment 3. Experiment 3 investigates whether the effect of the gender pay information on participants’ willingness to invest is
intentional or unintentional. We follow a procedure similar to Elliott et al. (2014). This experiment is similar to Experiment 1 except we manipulate ORDER, the order
participants respond to items used to measure the dependent variable and the mediators. Details about this procedure are described in Section 5.2. Panel A reports descriptive
statistics, Panel B reports the results of the ANOVA, Panel C reports the test of H1a and H1b, collapsing across ORDER as a replication of Experiment 1 results.
a
See Appendix 1 for the text of the gender pay information conditions and Tables 2e4 for descriptions of WILLINGNESS TO INVEST, FAIRNESS, and ECONOMIC CONSEQUENCES,
respectively. DVFirst (DVLast) indicates participants responded to the items measuring WILLINGNESS TO INVEST before (after) responding to the items measuring FAIRNESS
and ECONOMIC CONSEQUENCES.
b
Two-tailed p-value (one-tailed if bold).

18
C.R. Austin, D.D. Bobek and L.L. Harris Accounting, Organizations and Society xxx (xxxx) xxx

(p ¼ 0.06) by the compensation information than those in the gap
disclosed condition.31 As such, we conclude that participants’ re-
actions to the disclosure of gender pay information are intentional
and not merely the result of their affective reactions to the gender
pay information. This is consistent with the inferences drawn from
the mediation analyses reported in Fig. 2 in that investors perceive
real economic consequences resulting from the disclosure of
gender pay information.
In addition to this intended purpose of Experiment 3, the find-
ings in this experiment also ensure the robustness of the hypoth-
eses testing by demonstrating there are no carryover effects. We
manipulated the order of participants’ responses to the mediating
measures FAIRNESS and ECONOMIC CONSEQUENCES to be either
before or after the dependent measure WILLINGNESS TO INVEST
and did not observe any order effect. Thus, the observed effect of
gender pay information on investors’ willingness to invest is not
due to carryover effects from participants’ responses to WILLING-
NESS TO INVEST influencing their responses to FAIRNESS and
ECONOMIC CONSEQUENCES. In addition, as shown in Table 8, Panel
C, Experiment 3 replicates the findings of Experiment 1.
6. Conclusion
This study investigates whether and how a company’s gender
pay information affects investors’ willingness to invest in the
company. We find that when a company’s disclosure indicates
gender pay equity, compared to a gender pay gap and no gender
pay information, investors are more willing to invest in the com-
pany because the disclosure of gender pay equity influences their
assessment of the company’s compensation policies (i.e., perceived
fairness and anticipated economic consequences). In contrast,
compared to a company with no gender pay information, we find
the disclosure of a typical gender pay gap influences investors’
perceived fairness and their anticipated economic consequences of
the company’s compensation policies, but find limited evidence of
its influence on their investment decisions in the company. Results
from Experiments 2 and 3 confirm the findings from Experiment 1.
Furthermore, Experiment 2 suggests that investors are reacting to
the information content, not the fact that the gender pay infor-
mation was disclosed by the company; and Experiment 3 provides
evidence investors’ reactions are intentional. Having multiple ex-
periments allows us to provide additional evidence about how in-
vestors react to the disclosure of gender pay information as well as
the ability to replicate the findings in multiple experiments. This
strengthens the support for the results and the conclusions we
draw and enhances our understanding of the theorized process
(Asay, Guggenmos, Kadous, Koonce, & Libby, 2019).
The results of this study should be considered in light of po-
tential limitations. First, participants in this study made a hy-
pothetical decision without all the information that would
normally be available when deciding whether to invest. Future
research could examine the boundary conditions of how the
volume of information dilutes the impact of gender pay infor-
mation. Second, while we focus on the effect of disclosing a pay
gap between genders, there might be other types of pay infor-
mation that could potentially affect investors’ judgments. This
provides ample opportunities for future research to investigate
how other types of pay disclosures affect investors’ judgments.
Third, we use MTurk to recruit participants because we are
interested in the effect of the gender pay disclosure on nonpro-
fessional investors. Future research could empirically test
whether our findings apply to professional investors. Hong and
Kacperczyk (2009) provide evidence that large institutional in-
vestors are even more likely to be constrained by societal norms
than individual investors are; thus, professional investors may
react more strongly to the disclosure of gender pay information
than nonprofessional investors.
Lastly, since participants in our experiment played the role of
potential investors in a company, their responses may not be
representative of current investors in the company because prior
research indicates current investors fixate on different informa-
tion compared to prospective investors (Harris, Hobson, &
Jackson, 2016). However, we have no reason to believe our find-
ings would not hold if the participants were asked to play the role
of current investors. Theories of fairness suggest that if a gender
pay gap is considered discriminatory (Deutsch, 1975) and
perceived to violate the consistency rule (Leventhal, 1980), it is
likely to be viewed as unfair by both current and prospective in-
vestors. Moreover, prior research suggests that, compared to po-
tential investors, current investors are more sensitive to potential
economic consequences (Harris et al., 2016). Thus, our findings
may even be stronger with current investors given that percep-
tions of the potential economic consequences of the disclosure
directly affect willingness to invest. Nevertheless, future research
could empirically test how current investors react to the disclo-
sure of gender pay information.
Our study makes several contributions with theoretical as well
as practical implications. First, this study extends the literature on
CSR and its effect on investors’ judgments (e.g., Elliott, et al., 2014;
Kelly & Seow, 2016, Brown-Liburd et al., 2018) by focusing on an
important and timely issue, gender pay equity. This study is the
first, to our knowledge, to investigate how the disclosure of
gender pay information affects investor judgments. Our results
support the instrumental perspective of CSR (Orlitzky et al., 2003)
in that investors’ reactions are consistent with the notion that
there is a “business case for women’s equality … in the workplace”
(Grosser & Moon, 2019, p. 334). Women have many roles relevant
to business including employees, consumers, and investors; our
results suggest that male and female investors alike view gender

31
In addition, AFFECT is significantly different between the three gender pay
conditions (mean ¼ 5.58 in equity disclosed conditions, 5.11 in no gender pay
disclosed conditions, and 4.29 in gap disclosed conditions, respectively, all p < 0.01,
based on Bonferroni post-hoc tests) but is not affected by ORDER (p ¼ 0.65). We
also repeated the hypotheses testing and mediation analyses by including AFFECT
as either a covariate or a mediator. The untabulated results indicate that although
AFFECT is highly correlated with fairness, including AFFECT in the analyses does not
qualitatively change any of the reported results. While AFFECT also mediates the
effect of gender pay information on WILLINGNESS TO INVEST through FAIRNESS
and ECONOMIC CONSEQUENCES, the sequential mediation displayed in Fig. 2 is still
significant. Thus, we do not have evidence that participants are unintentionally
using the affect-as-information heuristic to process the gender pay information.
Instead, investors seem to intentionally react to the potential for real economic
consequences resulting from the disclosure of gender pay information by adopting
a systematic and deliberate processing approach.

19
C.R. Austin, D.D. Bobek and L.L. Harris
pay equity, compared to a gender pay gap or no gender pay in-
formation, as fairer and leading to positive economic
consequences.
Second, although scant, research related to pay disclosures
(e.g., Kelly & Seow, 2016) emphasizes the mediating role of fair-
ness perception on investors’ judgments; we provide evidence
that fairness perceptions do not directly influence the effect of
gender pay information on investors’ willingness to invest. Rather,
investors’ perceptions of the fairness of gender pay information
lead to their anticipation of future economic consequences, which
in turn influence their willingness to invest. Further, in Experi-
ment 3, unlike Elliott et al. (2014), who consider a company’s
overall CSR disclosure, we do not find that investors are unin-
tentionally using affect-as-information when assessing gender
pay information. Our evidence suggests investors perceive real
economic consequences related to the disclosure of gender pay
information, therefore their reactions to the disclosure appear to
be intentional.
Third, this study is in a setting that mimics the current US envi-
ronment where a company is not required to disclose pay by gender.
Our theory suggests that if all companies are required to report
gender pay information, our main results will still hold. Specifically,
all else equal, investors will prefer a company with gender pay equity
compared to a company with a gender pay gap because gender pay
equity is perceived to be fairer and to result in favorable economic
consequences. It would be interesting for future research to provide
further evidence on this issue if data becomes available as a result of
either mandatory or voluntary disclosure.
20
Accounting, Organizations and Society xxx (xxxx) xxx
Lastly, our results have practical implications. For example,
future research should consider how companies can mitigate
possible negative reactions from disclosing a gender pay gap.
Perhaps providing information by rank or type of position, or
hourly pay, may aid investors, and others, in assessing whether the
pay gap results from discrimination or other reasons. Our results
also have implications for companies and regulators regarding the
possible effects of disclosing pay by gender. We inform regulators
and managers that the disclosure of gender pay information mat-
ters to investors and their judgments. In addition, managers who
are in jurisdictions where this disclosure is mandatory should
consider proactively working to eliminate/minimize any gender
pay gap that exists at their companies because investors react
favorably to companies with gender pay equity and on average
believe a significant portion of the gender pay gap is the result of
discrimination.
Acknowledgements
We appreciate the Moore School of Business at the University of
South Carolina for funding this research.
Appendix 1
Experiment 1 Independent Variable: Gender Pay Disclosure
Manipulation
Panel A: Equity Disclosed Condition
C.R. Austin, D.D. Bobek and L.L. Harris Accounting, Organizations and Society xxx (xxxx) xxx

Panel B: Gap Disclosed Condition

Panel C: No Gender Pay Disclosed Condition

Appendix 2

Dependent measure: WILLINGNESS TO INVEST

Panel A: Attractiveness Assessments

21
C.R. Austin, D.D. Bobek and L.L. Harris Accounting, Organizations and Society xxx (xxxx) xxx

Panel B: Price Appreciation Assessments

22
C.R. Austin, D.D. Bobek and L.L. Harris Accounting, Organizations and Society xxx (xxxx) xxx

Panel C: Likelihood to Invest Assessments

23
C.R. Austin, D.D. Bobek and L.L. Harris Accounting, Organizations and Society xxx (xxxx) xxx

Appendix 3

Experiment 2

Panel A: Equity Disclosed Condition

Panel B: Equity Revealed Condition

Agustin, L. R. (2015). The policy on gender equality in Denmark- Update: In-depth

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