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Corporate Innovation: Do Diverse Boards Help?

Published online by Cambridge University Press:  05 May 2020

Heng An
An,, University of North Carolina Bryan School of Business and Economics
Carl R. Chen
Qun Wu
Zhang,, University of Dayton School of Business
Ting Zhang
Wu,, University of Nevada, Reno, College of Business Administration


We find that corporate innovation is positively related to board diversity as measured by a multidimensional index. The benefit of board diversity is more pronounced for firms with more complex operations, more experienced boards, and stronger external governance, suggesting that diverse boards have superior advising capacity. We find evidence to suggest that firms with diverse boards engage in more exploratory innovations and develop new technology in unfamiliar areas. As a result, they create a larger number of both most-cited and uncited patents. Finally, of the six different aspects of board diversity, professional diversity matters the most for corporate innovation.

Research Article
© Michael G. Foster School of Business, University of Washington 2019

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We thank an anonymous referee, Shibo Bian, Ching-Hung Chang, Rui Lu, Paul Malatesta (the editor), Onur K. Tosun, Tong Zhou, and seminar participants at the 2016 Central Taiwan Finance Association Conference, the 2016 Financial Management Association (FMA) Meeting, the 2017 Asian Finance Association Conference, the 2017 FMA European Conference, the 2018 China Finance Review International Conference, Hunan University, National Chengchi University, National Dong-Hua University, Peking University, Renmin University of China, Southwest University of Finance and Economics, Sun Yet-San University, Tsinghua University, Xi’an Jiaotong University, Zhejiang University, and Zhejiang University of Finance and Economics for their helpful comments and suggestions. An acknowledges the financial support from the Kathleen Price Bryan Dean’s Notable Scholar program. Wu thanks the University of Nevada, Reno, for summer research support, and Zhang thanks the University of Dayton School of Business Dean’s research grant.


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