Employee competency, diversity, and firm value

The relationship between employee quality and firm outcomes is extensively explored in the literature. Prior research focuses on examining the quality of top managers in a limited number of industries or using smaller datasets. This study fills this literature gap using demographic characteristics from Metropolitan Statistical Areas, where firm headquarters are located as a proxy for employee quality. The findings show that firms with high employee quality in terms of employee competency and diversity exhibit higher firm value. The results show that ensuring the availability of an educated and diverse workforce provides long-lasting firm value.