Ethnic diversity and business performance: Which firms? Which cities?

What is it about?

The research looks at the links between ethnic diversity in firms’ top teams (owners, partners and directors) and the performance of those firms (specifically, how much revenue they make). I also look at how those linkages vary across different types of firms, and how different types of urban environment may help or may not. I find positive diversity-links – but only for certain kinds of companies. The strongest links are for a group of large, knowledge-intensive businesses who comprise about 16% of my sample. The role of cities is also complex. For this first group, being in London amplifies the diversity ‘effects’. But for a second, smaller group of younger companies, diversity channels seem to be swamped by London’s higher costs and greater competition. These firms perform better when in smaller, cheaper cities like Manchester or Birmingham. In turn, that suggests policies to promote ethnic diversity in firms need to be quite carefully tailored to industry and local conditions.

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