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  • March–April 2020
  • Article
  • Organization Science

An Institutional Approach to Gender Diversity and Firm Performance

By: Letian Zhang
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Abstract

This study examines data from 35 countries and 24 industries to understand the relationship between gender diversity and firm performance. Previous studies report conflicting evidence: some find that gender-diverse firms experience more positive performance and others find the opposite. However, most research to date has focused on a single country or industry and has not accounted for possible variation across social contexts. This paper advances an institutional framework and predicts that gender diversity’s relationship with performance depends on both its normative and regulatory acceptance in the broader institutional environment. Using a unique longitudinal sample of 1,069 leading public firms around the world, I find that the relationship between gender diversity and firm performance varies significantly across countries and industries due to differences in institutional context. The more gender diversity has been normatively accepted in a country or industry, the more gender-diverse firms experience positive market valuation and increased revenue. These findings underscore the importance of the broader social context when considering the relationship between gender diversity and firm performance.

Keywords

Institutional Theory; Cross-cultural; Diversity; Gender; Organizations; Performance; Situation Or Environment; Cross-cultural And Cross-border Issues

Citation

Zhang, Letian. "An Institutional Approach to Gender Diversity and Firm Performance." Organization Science 31, no. 2 (March–April 2020): 439–457.
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About The Author

Letian Zhang

Organizational Behavior
→More Publications

More from the Author

    • 2020
    • Faculty Research

    Shaking Things Up: Unintended Consequences of Firm Acquisitions on Racial and Gender Inequality

    By: Letian Zhang
    • 2019
    • Harvard Business Review (website)

    When Gender Diversity Makes Firms More Productive

    By: Stephen Turban, Dan Wu and Letian Zhang
    • January–February 2019
    • Organization Science

    Who Loses When a Team Wins? Better Performance Increases Racial Bias

    By: Letian Zhang
More from the Author
  • Shaking Things Up: Unintended Consequences of Firm Acquisitions on Racial and Gender Inequality By: Letian Zhang
  • When Gender Diversity Makes Firms More Productive By: Stephen Turban, Dan Wu and Letian Zhang
  • Who Loses When a Team Wins? Better Performance Increases Racial Bias By: Letian Zhang
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