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Title:Diversity, social goods provision, and performance in the firm PDF Logo
Authors:Ellison, Sara
Greenbaum, Jeffrey
Mullin, Wallace P.
Issue Date:2010
Series/Report no.:CESifo working paper: Industrial Organisation 3171
Abstract:The last decade has seen a growing interest among economists on the effect of diversity on the provision of social goods and the stock of social capital. Indeed, in the workplace, cooperation, trust, and other social goods may be important elements of the smooth functioning of an office, but firm owners ultimately care about an office's performance, as reflected in revenues, costs, and profits. We explore this next logical question: how does diversity affect ultimate performance? We have a unique data set from a firm which operates numerous small offices in the United States and abroad. They have provided us with eight years of individual-level employee survey data, which measure quantities such as level of cooperation, as well as office-level measures of diversity and performance over that period. We find some evidence that more homogeneous offices enjoy higher levels of social goods provision but that those offices do not perform any better and may actually perform worse. We speculate that one possible reason that the more homogeneous offices do not perform better despite higher levels of social goods provision is that they do not have as diverse a portfolio of skills, talents, and interests on which to draw.
Subjects:diversity
social goods
JEL:J16
L20
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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