In 2024, Tractor Supply Company announced it was eliminating DEI initiatives. Outrage on social media put the company squarely in the middle of culture war discourse. By pulling back from DEI they hoped to move out of this spotlight. In the following weeks, their stock price surged. This left some wondering if abandoning DEI had economic benefits. This sentiment grew as the administration entered the white house in 2025. Federal policy and executive orders raised the question: Is DEI bad for business? Now a new study attempts to answer that question. The authors found that sticking to DEI has no impact on a firm’s stock price or revenue:
“Do corporations that resist executive orders perform worse financially? In January 2025, the Trump administration issued an executive order directing federal agencies to investigate and compel firms to eliminate diversity, equity, and inclusion (DEI) programs. Some firms complied with the order, whereas other firms resisted by reaffirming their DEI programs. We find that S&P 500 firms that maintained their DEI programs performed just as well as compliant firms, both in terms of stock market returns and revenue.”
Of course, this also means the inverse is true. Firms sticking to DEI exhibited no observable alpha compared to those that abandoned it. DEI programs do provide companies with value. However, much like ESG more broadly, this value isn’t easily captured in share price. As long as firms stay within the legal limits and carefully craft their DEI programs, they can reap the benefits of a diverse, inclusive workplace without anxiety about impact to revenue.
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