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Noteworthy Diversity Efforts And Financial Performance: Evidence From Diversityinc's Top 50, Benjamin P. Foster, Andrew Manikas, Dianna Preece, James R. Kroes

IT and Supply Chain Management Faculty Publications and Presentations

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 …