The Organization for Economic Co-operation and Development (OECD) reports that a male favoring pay gap exists in every one of its member countries. To reduce the gender pay gap, governments and investors are demanding that companies disclose gender pay information. While companies seem to resist these demands, there is little evidence about how investors might react to the disclosure of gender pay information. We draw on theories of fairness and the instrumental perspective of corporate social responsibility 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 information. 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.

This study investigates whether an individual's status as a current or a prospective investor affects the investor's susceptibility to earnings fixation and proposes a mechanism to reduce earnings fixation. Our experimental results suggest that current investors are more susceptible to earnings fixation than prospective investors, and that current investors can reduce earnings fixation by explicitly forecasting future earnings as part of their evaluation process. We provide theory‐consistent evidence that current investors' prevention focus makes them elevate the importance of summary earnings in their evaluation of a company. However, after forecasting future earnings, current investors view summary earnings as only one of several similarly important evaluation inputs rather than as one substantially more important input (relative to its components). Our study contributes to research on earnings fixation and investor status. We also contribute to practice by documenting the moderating effect of investor status on earnings fixation and by identifying a simple mechanism that current investors can use to reduce their susceptibility to earnings fixation.