We introduce a diversity measure of the top management team based on three attributes: compensation, gender and age. On average, firms with greater diversity of the top management team have a positive relation with abnormal returns based on the Fama- French 3-Factor model. However, our calendar-time valued-weighted portfolio approach shows that the relation between the diversity measure and abnormal return is negative. Overall, we conclude that the relation between diversity of the top management team and firm performance is not robust.
MSc in Finance Project-Simon Fraser University
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