Corporate Purpose and
Financial Performance

We construct a measure of corporate purpose within a sample of US companies based on
approximately 500,000 survey responses of worker perceptions about their employers. We find
that this measure of purpose is not related to financial performance. However, high purpose
firms come in two forms: firms that are characterized by high camaraderie between workers and
firms that are characterized by high clarity from management. We document that firms
exhibiting both high purpose and clarity have systematically higher future accounting and stock
market performance, even after controlling for current performance, and that this relation is
driven by the perceptions of middle management and professional staff rather than senior
executives, hourly or commissioned workers. Taken together, these results suggest that firms
with employees that maintain strong beliefs in the meaning of their work experience better

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