The effect of diversity on corporate social performance: An empirical analysis

Abstract

This study investigates the effect of employee diversity (operational and executive) on the level  of  Corporate  Social  Performance  of the   firm.   Building   on   Stakeholder   theory, the author argues that Diversity helps an organization improve its ability to identify and meet diverse stakeholders’ needs, thus higher Corporate Social Performance is expected among companies with higher levels of both executive and operative employee diversity. Utilizing secondary data and a regression analysis to test the proposed hypotheses, this study contributes to the literature of Corporate Social Performance by identifying this new driver, presenting some contextual differences that might exist in practical applications, and showing the relationship with previous studies of Stakeholder theory and CSP. In addition, a new simple measure of CSP is developed and presented; this innovative measure is compared with previous ones already accepted in the literature and its statistical validity is proven. Finally, the author discusses implications for future research.