Workforce Diversity and Stock Returns

This paper examines if firms with the most racially diverse employees enjoy superior benefits and performance above the market average. The problem of the study is to analyze risk premiums and risk-adjusted excess returns of a portfolio of firms with most diverse employees in the United States from 2006 to 2011. The results show that the portfolio average risk premiums are positive and greater than the market risk premiums in 2006 and from 2009 to 2011. The portfolio average risk-adjusted excess returns from the single-index model and factor-model are positive, although not statistically significant, for the 5-year holding period intervals