Board experiential diversity and corporate radical innovation

被引:33
作者
Genin, Aurora [1 ]
Ma, Wenting [2 ]
Bhagwat, Vineet [3 ]
Bernile, Gennaro [4 ]
机构
[1] Indiana Univ, Bloomington, IN 47405 USA
[2] Univ Massachusetts Amherst, Amherst, MA USA
[3] George Washington Univ, Washington, DC USA
[4] Univ Miami, Coral Gables, FL USA
基金
美国国家科学基金会;
关键词
board advising; experiential diversity; instrumental variable; panel data; radical innovation; MYOPIC LOSS AVERSION; FIRM PERFORMANCE; TECHNOLOGICAL-INNOVATION; DIRECTORS; ORGANIZATIONS; BREAKTHROUGHS; AGENCY; SIZE;
D O I
10.1002/smj.3499
中图分类号
F [经济];
学科分类号
02 ;
摘要
Research Summary: How does board experiential diversity affect corporate radical innovation? We find that the combined diversity of directors' educational, industrial, and organizational experiences spurs the quantity and quality of path-breaking patents developed at a firm. Instrumental variable analysis leveraging exogenous variation in firm access to the nonlocal supply of directors with diverse experiences indicates causality, which is corroborated by difference-in-differences tests. Firm heterogeneity suggests experientially diverse directors spur radical innovation by better serving the firm's advisory needs rather than via improved governance. Our findings enrich theoretical insights into how corporate board leadership may affect innovation and long-term value creation at the firm.Managerial Summary: This study offers practical guidance on director recruitment. Board directors with diverse educational, industrial, and organizational experiences can support the invention of radical technology. This type of innovation can create substantial economic and social value. Noting the benefits of diverse experiences in the boardroom, corporate executives can search beyond the traditional director pedigree (e.g., Ivy League-educated financiers), where female and minority individuals remain underrepresented. In doing so, the firm can find more qualified candidates to assemble a demographically and intellectually diverse board, thus cultivating an inclusive corporate culture conducive to shareholder and stakeholder value creation.
引用
收藏
页码:2634 / 2657
页数:24
相关论文
共 55 条
[1]   Women in the boardroom and their impact on governance and performance [J].
Adams, Renee B. ;
Ferreira, Daniel .
JOURNAL OF FINANCIAL ECONOMICS, 2009, 94 (02) :291-309
[2]   Organizing Knowledge Production Teams Within Firms for Innovation [J].
Aggarwal, Vikas A. ;
Hsu, David H. ;
Wu, Andy .
STRATEGY SCIENCE, 2020, 5 (01) :1-16
[3]   Does Science Advance One Funeral at a Time? [J].
Azoulay, Pierre ;
Fons-Rosen, Christian ;
Zivin, Joshua S. Graff .
AMERICAN ECONOMIC REVIEW, 2019, 109 (08) :2889-2920
[4]   Networks and Innovation: Accounting for Structural and Institutional Sources of Recombination in Brokerage Triads [J].
Balachandran, Sarath ;
Hernandez, Exequiel .
ORGANIZATION SCIENCE, 2018, 29 (01) :80-99
[5]   Independent boards and innovation [J].
Balsmeier, Benjamin ;
Fleming, Lee ;
Manso, Gustavo .
JOURNAL OF FINANCIAL ECONOMICS, 2017, 123 (03) :536-557
[6]   Consensus in Diverse Corporate Boards [J].
Baranchuk, Nina ;
Dybvig, Philip H. .
REVIEW OF FINANCIAL STUDIES, 2009, 22 (02) :715-747
[7]   To your heart's content: A model of affective diversity in top management teams [J].
Barsade, SG ;
Ward, AJ ;
Turner, JDF ;
Sonnenfeld, JA .
ADMINISTRATIVE SCIENCE QUARTERLY, 2000, 45 (04) :802-836
[8]   RELATIONAL PLURALISM IN DE NOVO ORGANIZATIONS: BOARDS OF DIRECTORS AS BRIDGES OR BARRIERS TO DIVERSE ALLIANCE PORTFOLIOS? [J].
Beckman, Christine M. ;
Schoonhoven, Claudia Bird ;
Rottner, Renee M. ;
Kim, Sang-Joon .
ACADEMY OF MANAGEMENT JOURNAL, 2014, 57 (02) :460-483
[9]   Are foreign investors locusts? The long-term effects of foreign institutional ownership [J].
Bena, Jan ;
Ferreira, Miguel A. ;
Matos, Pedro ;
Pires, Pedro .
JOURNAL OF FINANCIAL ECONOMICS, 2017, 126 (01) :122-146
[10]   MYOPIC LOSS AVERSION AND THE EQUITY PREMIUM PUZZLE [J].
BENARTZI, S ;
THALER, RH .
QUARTERLY JOURNAL OF ECONOMICS, 1995, 110 (01) :73-92