Document Type

Article

Publication Date

6-2021

Abstract

This study provides evidence that diversity efforts are associated with improved organizational performance. We explore the benefits of diversity by analyzing long-term shareholder value (Tobin's q) and short-term performance (return on assets) of companies cited for being leaders in the area of diversity. Tobin's q is significantly higher for companies included on the DiversityInc Top 50 list than other companies, implying that diversity efforts increase long-term shareholder value. Companies on a DiversityInc list also have significantly better short-term financial performance, return on assets, than similar companies in their industry. We also conduct a Granger causation analysis, and the results are consistent with our interpretation that appearance on the DiversityInc list increases Tobin's q. Our study contributes to the literature by comparing companies notably recognized for diversity efforts to companies not recognized, and examining the long-term benefits of those efforts.

Copyright Statement

This is an author-produced, peer-reviewed version of this article. © 2021, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International license. The final, definitive version of this document can be found online at Advances in Accounting, https://doi.org/10.1016/j.adiac.2021.100528

Available for download on Thursday, June 01, 2023

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