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DEI and Stock Returns

July 13, 2023 • Posted in Aesthetic Investments

Do companies that make the strongest commitments to diversity, equity and inclusion (DEI) generate attractive stock returns? In their April 2023 paper entitled “Diversity, Equity, and Inclusion”, Alex Edmans, Caroline Flammer and Simon Glossner relate DEI to future firm performance and stock returns. They measure firm DEI based on 250 confidential employee responses to 13 of 58 questions on a Trust Index survey that comprises two thirds of the score for each firm applying to be one of the Best Companies to Work For in America. Using the specified annual survey responses, associated firm accounting data and monthly stock returns for all companies applying to be a best company during 2006 through 2021, they find that: (more…)

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