Leite, António NogueiraThomfohrde, Alissa2025-08-012025-08-012025-01-302025-02-01http://hdl.handle.net/10362/185892This thesis investigates the effect of educational background diversity (EDUDIV) and industry expertise diversity (INDIV) within Top Management Teams (TMTs) on firm performance measured by Tobin`s Q in 150 Eurozone companies. Using an advancement of the Shannon Diversity Index, econometric models evaluate three dimensions of the diversity effects: main, sector-specific, and country-specific. Grounded in Upper Echelons Theory (UET) and Resource Dependence Theory (RDT), the findings reveal that EDUDIV generally has a positive effect on firm performance, though this effect varies based on the company´s economic sector. High-tech (HT) sectors and countries with advanced talent ecosystems, as reflected in the Global Talent Competitiveness Index (GTCI), particularly benefit from EDUDIV by enhancing strategic adaptability and fostering innovation. In contrast, INDIV demonstrates a negative relationship overall, with exceptions in certain economic sectors, specifically within HT areas. The benefits from diverse perspectives might be outweighed by coordination challenges, resulting in varying levels of significance. These results underscore the nuanced role of TMT diversity, suggesting that its effect differs across contexts and excessive heterogeneity can hinder cohesion and decision-making. This research provides actionable insights for companies and policymakers seeking to optimize TMT composition to enhance firm performance.engTMTTMT diversityBoard heterogeneityFirm performanceEducational background diversityIndustry expertise diversityTobin's Q EurozoneEconomic sectorsHigh-techLow-techmaster thesis203960025