Investigating the impact of workforce racial diversity on the organizational corporate social responsibility performance: an institutional logics perspective

Abstract

Racial diversity is considered an integral part of the business world. The extant literature has focused on the effect of racial diversity on a firm's financial performance and presented mixed findings. Building on the institutional logics lens and using a sample of 204 firms belonging to 9 industries and spread across 21 countries for a period of six years, we explore the impact of workforce racial diversity on the Corporate Social Responsibility Performance (CSRP) of a firm. In addition, we also investigate the contingency effects of a firm's absorptive capacity and slack resources on the proposed relationship. Using a seemingly unrelated regression model and accounting for endogeneity, we find that racial diversity has an inverted U-shaped relationship with a firm's financial and social performance and has a U-shaped relationship with its environmental performance. We also find significant moderating effects. Thus, we contribute to the theory and practice in the field.