EXAMINING THE INFLUENCE OF RACE, ETHNICITY, AND GENDER ON INVESTOR STOCK RISK BEHAVIOR

Abstract

Corporate firms, both domestic and international, are increasingly emphasizing the importance of a diverse workforce in their mission statements. This commitment is not only rooted in ethical and moral considerations but is also recognized as a sound business practice for enhancing organizational performance and mitigating investor stock risks. This paper explores the nexus between diversity initiatives and their impact on stock risks, aligning with a growing body of research (e.g., Awais, Rasheed & Khursheed, 2016; Baker, 2016; Barber, Yassaman & Thomas, 2016; Betul & Lambkin, 2017; Billett, Jiangb & Regoa, 2014; Bolla, Kohler & Wittig, 2016; Bonaparte, Bazley, Korniotis & Kumar, 2017; Brown, 2007; Korstanji, 2017; Noussair, Trautmann & Van De Kuilen, 2014; Pandey, Sharma & Mittal, 2013; Strang, 2017). Pisani (2017) highlights the current issue of negligible investor stock risks due to expensive stock prices, resulting in subdued buying enthusiasm. He identifies geopolitical factors, weaker economic data, high stock market valuations, and the risk associated with disappointing earnings and fiscal reforms as the four main challenges. Critically examining articles in the International Journal of Risk and Contingency Management, Volume 6, Issue 3, Strang (2017) underscores the need for businesses to balance profitability with risk mitigation. This study argues that maintaining a diverse workforce, as reflected in mission statements, can potentially influence stock prices and investor behavior concerning stock risks.