Board Diversity, Inventor Collaboration, and Corporate Innovation

47 Pages Posted: 5 Aug 2016 Last revised: 20 Feb 2019

See all articles by Chunfang Cao

Chunfang Cao

Sun Yat-Sen University (SYSU); Southwest University of Finance and Economics

Xiaoyang Li

Deakin University

Cheng (Colin) Zeng

Hong Kong Polytechnic University

Date Written: August 3, 2016

Abstract

Many firms tout their commitment to diversity, sometimes appointing racial minorities to their board of directors. We find that firms with more minority directors are associated with greater innovation output. Using patent-inventor information, we uncover an important yet previously unaccounted-for channel by linking board diversity to inventor diversity. In particular, we find that firms with more minority directors attract and retain more productive minority inventors and promote greater collaboration among inventors of different races, which lead to more patents and patents with greater market value. The results shed light on how racially-diverse boards foster conducive environment for inventors to succeed.

Keywords: Innovation, Board diversity, Inventor Collaboration, Minority Inventor

JEL Classification: G34, O32

Suggested Citation

Cao, Chunfang and Li, Xiaoyang and Zeng, Cheng, Board Diversity, Inventor Collaboration, and Corporate Innovation (August 3, 2016). Available at SSRN: https://ssrn.com/abstract=2817734 or http://dx.doi.org/10.2139/ssrn.2817734

Chunfang Cao

Sun Yat-Sen University (SYSU) ( email )

135, Xingang Xi Road
Guangzhou, Guangdong 510275
China

Southwest University of Finance and Economics ( email )

China

Xiaoyang Li (Contact Author)

Deakin University ( email )

70 Elgar Rd
Burwood, Victoria 3125
Australia

Cheng Zeng

Hong Kong Polytechnic University ( email )

11 Yuk Choi Rd
Hung Hom
Hong Kong

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