Diversity and Inclusion: Evidence from Corporate Inventors

Abstract

Inclusion is often considered a crux of diversity m anagement. However, little is known about how board diversity affects corporate performance through organizational inclusive behavior. Using the inventor-level patenting data, we find that firms with more ethnic minority directors attract more productive ethnic minority inventors and promote greater collaboration among inventors, leading to more patents and patents with greater market value. Our findings are robust to a battery of sensitivity tests. Overall, our study offers new evidence that racially diverse boards cultivate inclusive environment for inventors to succeed.

Keywords: Innovation; Board Diversity; Inventor Collaboration; Minority Inventor

JEL Classification: G34, O32