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The relationship between shareholder wealth effects, diversity, and publicity as a marketing strategy

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Abstract

Using theFortune diversity elite as a sample, the authors find significant initial shareholder gains, as measured by stock price reaction to firms publicizing their inclusion on the diversity elite list as a part of their marketing communication strategy. However, these initial effects do not materialize into higher annual measures of profitability (i.e., return on equity, return on assets, and return on investment) for these firms when compared with other similarly sizedfirms from similar industries in theFortune 1000 list. This suggests that for firms seeking enhancements in reportable measures of financial performance, having and publicizing a diverse workforce, including sales personnel, does not provide superior financial performance in comparison with other non-diversity elite firms. Shareholder wealth gains to these firms, however, are real and significant.

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Authors and Affiliations

  1. The University of Texas at Tyler, Tyler, USA

    Vivek K. Pandey, Kevin J. Shanahan & Scott W. Hansen

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  1. Vivek K. Pandey
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  2. Kevin J. Shanahan
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Vrvek K. Pandey (vpandey@mail.uttyl.edu) (D.B.A., Mississippi State University) is an associate professor of finance at the University of Texas at Tyler and holds Chartered Financial Analyst and Financial Risk Manager professional certification. He has published manuscripts inFinancial Review, Applied Financial Economics, theJournal of International Business Research, theJournal of Marketing Channels, and other outlets. His research interests include applications of chaos theory to financial markets and applications of financial theory to related disciplines.

Kevin J. Shanahan (kshanahan@mail.uttyl.edu) (Ph.D., New Mexico State University) is an assistant professor of marketing at the University of Texas at Tyler. He has been published in theJournal of Business Ethics, the Journal of Current Issues and Research in Advertising, Business and Society Review, Marketing Education Review, and elsewhere. His research interests include advertising and public policy, marketing ethics, sports marketing, and aberrant consumer behavior.

Scott W. Hansen (shansen@mail.uttyl.edu) (Ph.D., Oklahoma State University) is an associate professor of marketing at the University of Texas at Tyler. His articles have appeared in theJournal of Business Research, theJournal of Marketing Theory and Practice, theJournal of Business and Industrial Marketing, Industrial Marketing Management, andMarketing Education Review. His fields of interest include consumer complaint behavior and buyer-seller relationships.

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Pandey, V.K., Shanahan, K.J. & Hansen, S.W. The relationship between shareholder wealth effects, diversity, and publicity as a marketing strategy. JAMS 33, 423–431 (2005). https://doi.org/10.1177/0092070305277384

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