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Ethnic diversity and firm performance: Evidence from India

Author

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  • Sefa Awaworyi Churchill
  • Yeti Nisha Madhoo
  • Shyam Nath

Abstract

We examine if the financial performance of firms in India depends on the level of ethnic diversity in the state or district in which they operate. Thus, using data on 1,199 listed firms in the materials, industrial and infirmation technology sectors in India, we examine the impact of ethnic diversity on various measures of firm financial performance. Based on indices of fractionalization calculated for 15 states and 74 districts in which these firms operate, we find evidence of negative effects of ethnic diversity on firm performance. These results are robust to endogeneity and alternative ways of measuring diversity.

Suggested Citation

  • Sefa Awaworyi Churchill & Yeti Nisha Madhoo & Shyam Nath, 2022. "Ethnic diversity and firm performance: Evidence from India," ASARC Working Papers 2022-01, The Australian National University, Australia South Asia Research Centre.
    • Handle: RePEc:pas:asarcc:2022-01
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    File URL: https://acde.crawford.anu.edu.au/sites/default/files/publication/acde_crawford_anu_edu_au/2022-11/asarc_working_paper_20221.pdf
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    More about this item

    Keywords

    Environmental governance; fiscal decentralization; atmospheric pollution; spillover effects; non-point source pollution; India;
    All these keywords.

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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