Employment Non-Discrimination Acts and Corporate Innovation

Management Science, Forthcoming

44 Pages Posted: 30 Jul 2014 Last revised: 7 Jan 2016

See all articles by Huasheng Gao

Huasheng Gao

Fanhai International School of Finance, Fudan University

Wei Zhang

Shanghai University of Finance and Economics

Date Written: January 4, 2016

Abstract

We show that U.S. state-level Employment Non-Discrimination Acts (ENDAs) — laws that prohibit discrimination based on sexual orientation and gender identity — spur innovation. We find a significant increase in patents and patent citations for firms headquartered in states that have passed ENDAs relative to firms headquartered in states that have not. This result is more pronounced for firms that previously have not implemented pro-gay non-discrimination policies, for firms in states with a large homosexual population, and for firms in human capital-intensive industries. Lastly, we provide evidence suggesting that ENDAs affect innovation by matching pro-gay employees, who are generally more creative than anti-gay employees, with innovative firms.

Keywords: Innovation; Patents; Workplace Discrimination; Anti-discrimination Law; Sexual Orientation

JEL Classification: O31, J24, K31, M14

Suggested Citation

Gao, Huasheng and Zhang, Wei, Employment Non-Discrimination Acts and Corporate Innovation (January 4, 2016). Management Science, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2473250 or http://dx.doi.org/10.2139/ssrn.2473250

Huasheng Gao

Fanhai International School of Finance, Fudan University ( email )

Beijing West District Baiyun Load 10th
Shanghai, 100045
China
2165642222 (Phone)
2165642222 (Fax)

Wei Zhang (Contact Author)

Shanghai University of Finance and Economics ( email )

777 Guoding Road
Shanghai, AK Shanghai 200433
China

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