New Research Finds Investors Prefer Companies With Greater Gender Diversity

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That got Margaret Neale of Stanford wondering: Might Google’s stock have gone up instead of down if its diversity numbers were better?

by Neale and a team of researchers finds the answer is yes.

Previous research into gender diversity was inconclusive and could only suggest a correlation, not causation. Did greater diversity result in improved performance, or is a company that is already performing well merely in a better position to hire more women?A slightly different story in finance Using the data from the Times study, Neale and her team found the same relationship between gender diversity reports and stock prices. These results echo the findings of a McKinsey & CompanyWhy do investors value gender diversity?

To get at that question, the researchers recruited a sampling of people, all with managerial experience, and asked them to bet imaginary money on how diversity reports might affect a company’s stock price. Specifically, how would diversity numbers that were either better or worse than expected play out in the market?

 

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