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Exploring the correlation between diversity and financial performance: an empirical study

Author

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  • Mengsteab T. Beraki
  • Mussie T. Tessema
  • Parag Dhumal
  • Kathryn J. Ready
  • Sebhatleab Kelati

Abstract

Although a myriad of studies has been conducted on workforce diversity issues, only a handful of studies have examined the correlation between diversity-related values and the financial performance of companies. This study examines this relationship by testing the extent to which diversity-related values are correlated with the financial performance of publicly traded companies using companies listed on the New York Stock Exchange. Companies were grouped into primary, secondary, and tertiary sectors for the analysis. The findings reveal that the diversity value dimension is positively correlated with companies' financial performance. No significant differences were found between the commitment to diversity value dimension and the three sectors. Implications of these findings and future research directions are discussed.

Suggested Citation

  • Mengsteab T. Beraki & Mussie T. Tessema & Parag Dhumal & Kathryn J. Ready & Sebhatleab Kelati, 2022. "Exploring the correlation between diversity and financial performance: an empirical study," International Journal of Business Performance Management, Inderscience Enterprises Ltd, vol. 23(1/2), pages 206-223.
    • Handle: RePEc:ids:ijbpma:v:23:y:2022:i:1/2:p:206-223
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    Cited by:

    1. Gabriel Croitoru & Nicoleta Valentina Florea & Constantin Aurelian Ionescu & Valentina Ofelia Robescu & Liliana Paschia & Marilena Carmen Uzlau & Marinela Daniela Manea, 2022. "Diversity in the Workplace for Sustainable Company Development," Sustainability, MDPI, vol. 14(11), pages 1-26, May.
    2. Jolanta Maj, 2023. "Influence of Inclusive Work Environment and Perceived Diversity on Job Satisfaction: Evidence from Poland," Central European Business Review, Prague University of Economics and Business, vol. 2023(4), pages 105-122.

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