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Contents Introduction

In this report, I present the results of research conducted as a part of Research Project entitled　“Empirical analysis of the impact of organizational diversity of performance” during the Fiscal Year 2019. The main objective of this project was to empirically analyze the impact of national　diversity on team performance.

As the movement of people is common these days, national diversity in the workforce is currently seen everywhere in the world. For example, CEOs of famous companies such as Apple, Google, and PepsiCo are foreign-born executives. Similarly, more than half of the IT professionals in the Silicon Valley in the US are born overseas. The trend towards national diversity seems to continue in the future due to numerous social issues and policy changes in various countries. For example, the Japanese government amended its policy towards accepting more migrant workers to work in Japan corresponding to the decline in the labor force population and labor shortage in various sectors. Furthermore, as the movement of people tends to increase due to various political and social upheavals such as; the refugee crisis in Myanmar and in the Middle East, civil wars and conflicts in Africa, diversity in the workforce will increase as these migrants assimilate into the society. It is, therefore, necessary to examine how such changes would affect the performance of an organization.

In order to conduct empirical research, this research analyzed the dataset from a sports labor market in India. I concentrated on sports industry as the sports statistics are much more detailed and accurate than typical microdata samples such as Census or various survey dataset. In particular, I empirically examined the impact of national diversity on team performance from Indian Premier League (IPL), the largest cricket league in the world. I concentrate on the sports of cricket as we have various kinds of performance as our outcome variable. In some performance, communication along with skill plays a vital role whereas in others communication is minimum. In this way, we can measure the mechanism behind difference in performance. Furthermore, I concentrate on IPL as all teams are governed by standardized rules of competition that could eliminate unobservable factors that would affect the power of the study.

Considering more than 1000 team level diversity and performance indicators, I tried to answer the following three questions. Does more diversity of a workforce increase team performance (intra-horizontal diversity)? Does a more diverse team succeed if it is competing against a less diverse team (inter-horizontal diversity)? Does a team perform better if the leader 2 is from majority group (vertical diversity)?

From the empirical analysis, I did not find any statistically significant relationship between intra-horizontal diversity and team performance. Performance is unaffected by the higher intra horizontal diversity of a team. However, I found a positive and statistically significant relationship between inter-team horizontal diversity and performance where communication is low. And finally, I found a negative and statistically significant relationship between vertical diversity and the overall performance of a team. The results suggest that performance is negatively affected by the vertical diversity of a team. Finally, I provide various important policy implications as well as limitations of this research.

I am grateful to the Asian Growth research Institute (AGI) for its financial support of this research. I am grateful to Masaru Sasaki, Fumio Ohtake, Nobuyoshi Kikuchi, Hideo Owan, Kawaguchi Daiji, and other participants of the Labor Economics Conference in Japan for their valuable comments. I am solely responsible for all remaining errors, contents, and opinions expressed in this paper.