Does diversity pay off? Definitions, Antecedents and Consequences of TMT Diversity

This thesis aims to generate practical and theoretical value in the field of diversity. In order to answer the research question “Does diversity pay off?”, diversity is defined as a three-dimensional concept. By focusing on demographic diversity, antecedents and drivers are identified. Based on literature research, and theoretical concepts – namely, Upper Echelons Theory and Social Identity Theory, a conceptual model is developed, which reveals the equivocal consequences of diversity within the Top Management Team (TMT) upon firm performance. The relation is evaluated by an empirical analysis, on a sample of 80 listed German firms within 2017-2019. The research assumes that a gender diverse TMT, leads to an enhanced financial performance. Results indicate no significant positive relationship. However, interviewed experts indicate, that diversity will most likely have a positive influence on firms, if it is well integrated.