The influence of workforce diversity on the financial performance of Japanese companies

Abstract

Most diversity-related research focused on the United States and European countries, with only a few cases based on the Asian context. In Japan, the diversity issue has primarily focused on unfairness in the workplace between women and men. However, with increasing expectations for workforce diversity, workplace issues related to people with disabilities, foreign nationals, and the elderly have also gained attention. This chapter analyses the relationship between workforce diversity and financial performance using panel data of Japanese companies collected by Toyo Keizai between 2014 and 2019. Corporate diversity and inclusion (D&I) initiatives in Japan are still developing. Creating a work environment where all employees can thrive by adopting inclusive organizational practices designed to create a positive work experience and leverage the potential of all employees regardless of age, gender, nationality, and diversity is key to enhancing the performance of Japanese companies and revitalizing the Japanese economy.