How gender diversity shapes company performance: a new approach to measuring impact
Firms across the globe are working hard to improve gender diversity in their leadership, but does greater representation actually translate into better company performance? While previous research suggests that diversity can matter, the evidence is often mixed and difficult to interpret. This study takes a different approach by introducing a new method for estimating causal effects in real-world settings, where data is messy and sample sizes are limited.
In this discussion, the authors of Finite-sample non-parametric bounds with an application to the causal effect of workforce gender diversity on firm performance will present their paper that draws on data from nearly 1,000 publicly listed companies between 2015 and 2022. The research identifies that firms in growth sectors see measurable gains in value when women hold at least 30% of senior roles, while cyclical sectors require closer to 65% representation before benefits emerge. These findings challenge the idea that small, incremental changes are enough, and raise important questions about how companies set diversity targets and measure success.
Meet our speakers
Dr Grace Lordan is the author of Think Big, the Founding Director of The Inclusion Initiative and an Associate Professor at the LSE. Grace is an economist, and is an expert on the determinants of individual success, labour markets and skills, the future of work and creating inclusive leaders. Her research is focused on measuring the benefits of inclusion within and across firms, as well as designing interventions that level the playing field for under-represented talent within firms. Grace is an expert advisor to the UK government sitting on their skills and productivity board, is a member of the UK government’s BEIS social mobility taskforce and is on the Women in Finance Charter’s advisory board.
Dr Kaveh Salehzadeh-Nobari is a Postdoctoral Researcher in data science in The Inclusion Initiative at LSE. His work focuses on utilising Machine Learning and Econometric techniques to measure and infer the impact of Diversity, Equity, and Inclusion (DEI) on firms’ performance. Kaveh also maintains visiting affiliations with the Brevan Howard Centre for Financial Analysis and the Centre for Climate Finance & Investment (CCFI) at Imperial College London.
This seminar is part of the DSI Faculty Affiliate Research Showcase series that highlights research from across LSE in the field of Data Science and AI.
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