Board Diversity, Inventor Collaboration, and Corporate Innovation
47 Pages Posted: 5 Aug 2016 Last revised: 20 Feb 2019
Date Written: August 3, 2016
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: Suggested Citation