Much has been made in recent years of studies showing that diverse businesses perform better: hire women and minorities, they argue, and reap the rewards in your bottom line. Yet many of these studies share a common problem. They show correlation between diversity and business performance, but they don’t demonstrate that diversity is the reason these businesses perform better.
Now, a new study by Harvard researchers cleverly tackles this problem with a research design that makes it possible to estimate the causal impact of gender diversity. The researchers — Harvard Business School professor Paul Gompers and Harvard economics PhD student Sophie Wang — compared venture capitalists who have daughters with those who do not.