Investigate the Impact of Employee Diversity on Resilience of External Crises: Evidence from A-share Listed Company

¹ Marshall School of Business, University of Southern California, Los Angeles 90089, United States of America
² Business School, Sichuan University, Chengdu 610065, People’s Republic of China

^* e-mail: rensy@scu.edu.cn

Abstract

Resilience has emerged as a crucial measure of a company’s ability to withstand challenges in the current complex business environment. However, prior research indicates that employee diversity may not consistently lead to a positive impact on corporate resilience. This paper investigates the impact of diversity on resilience in the face of various external crises by examining the performance of Chinese listed companies during the 20-year period following their accession to the World Trade Organization. Employee diversity is operationalized in this study by changes in the number of employees in non-core departments, while resilience is represented by the fluctuation of the stock price minus the industry range fluctuation. Employing a fixed-effect model to analyze 20-year panel data, we find that an increase in employee diversity does not always lead to improved corporate resilience during external crises. The purpose of this paper is to examine the relationship between employee diversity and resilience in the face of different external shocks and explore why diversity may fail to enhance resilience during such circumstances.