Empir Econ https://doi.org/10.1007/s00181-018-1463-2 Firm ﬁnancial performance in Sub-Saharan Africa: the role of ethnic diversity Sefa Awaworyi Churchill Received: 13 October 2016 / Accepted: 25 April 2018 © Springer-Verlag GmbH Germany, part of Springer Nature 2018 Abstract Using data from Sub-Saharan Africa, this research note examines the effect of ethnic and linguistic diversity on ﬁrms’ ﬁnancial performance. We measure diver- sity using indices of fractionalization based on the Herﬁndahl-type formula and ﬁnd evidence of a strong positive effect of diversity on ﬁrm performance indicators such as total revenue, dividends, earnings before interest and tax, net sales/turnover and return on assets and total factor productivity. We argue that the positive effect is driven by the inﬂuence of ethnic diversity on important channels such as innovation and entrepreneurship. Our results are robust to alternative measures of fractionalization and endogeneity. Keywords Ethnic diversity · Firm performance · Proﬁts · Africa JEL Classiﬁcation J15 · M13 · L25 1 Introduction The existing literature on the determinants of ﬁrm performance primarily focuses on determinants such as ﬁrm-level, ownership and managerial factors (see, e.g., Hawaw- inietal. 2003; Huselid et al. 1997), macroeconomic and institutional factors (see, e.g., Kangasharju 2000), market and industry structures (see, e.g., Bass
Empirical Economics – Springer Journals
Published: May 30, 2018
It’s your single place to instantly
discover and read the research
that matters to you.
Enjoy affordable access to
over 18 million articles from more than
15,000 peer-reviewed journals.
All for just $49/month
Query the DeepDyve database, plus search all of PubMed and Google Scholar seamlessly
Save any article or search result from DeepDyve, PubMed, and Google Scholar... all in one place.
Get unlimited, online access to over 18 million full-text articles from more than 15,000 scientific journals.
Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.
All the latest content is available, no embargo periods.
“Hi guys, I cannot tell you how much I love this resource. Incredible. I really believe you've hit the nail on the head with this site in regards to solving the research-purchase issue.”Daniel C.
“Whoa! It’s like Spotify but for academic articles.”@Phil_Robichaud
“I must say, @deepdyve is a fabulous solution to the independent researcher's problem of #access to #information.”@deepthiw
“My last article couldn't be possible without the platform @deepdyve that makes journal papers cheaper.”@JoseServera