Does Diversity Pay? A Replication of Herring (2009)

Abstract

In an influential article published in the American Sociological Review in 2009, Herring finds that diverse workforces are beneficial for business. His analysis supports seven out of eight hypotheses on the positive effects of gender and racial diversity on sales revenue, number of customers, perceived relative market share, and perceived relative profitability. This comment points out that Herring’s analysis contains two errors. First, missing codes on the outcome variables are treated as substantive codes. Second, two control variables—company size and establishment size—are highly skewed, and this skew obscures their positive associations with the predictor and outcome variables. We replicate Herring’s analysis correcting for both errors. The findings support only one of the original eight hypotheses, suggesting that diversity is nonconsequential, rather than beneficial, to business success.