Abstract

This paper examines the effect of state-level culture in the US on the adoption of firms’ workplace diversity policies. Using firm-level panel data over the period 2011–2014, we document that firms in highly individualistic states are less likely to adopt workplace diversity policies, which in turn negatively affects firm performance. Our results are robust to alternative variables and econometric specifications. Our findings provide insights into the contemporary debate on the economic aspects of workplace diversity policies for firms operating in different cultural backgrounds.