Does Employee Treatment and Workforce Diversity Impact Corporate Innovative Efficiency?

62 Pages Posted: 5 Aug 2014 Last revised: 11 Jul 2016

Roger C. Mayer

University of Akron

Richard S. Warr

North Carolina State University

Jing Zhao

Portland State University - The School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: June 2016

Abstract

Using patents and citations per R&D dollar as measures of innovation efficiency, we find that corporate policies that result in better treatment of employees and a more pro-diversity culture, specifically treatment of women and minorities, enhance future innovative efficiency, even after controlling for endogeneity. Such positive effect is stronger in more innovative firms, more financially constrained firms, more undervalued firms, firms where employees are more valuable, firms in industries with longer employee tenure and firms with stronger governance. Better employee treatment and diversity policies also increase firm value via this positive effect on innovation efficiency. We suggest a channel through which employee treatment may enhance firm value.

Suggested Citation

Mayer, Roger C. and Warr, Richard S. and Zhao, Jing, Does Employee Treatment and Workforce Diversity Impact Corporate Innovative Efficiency? (June 2016). Available at SSRN: https://ssrn.com/abstract=2476543 or http://dx.doi.org/10.2139/ssrn.2476543

Roger C. Mayer

University of Akron ( email )

259 S. Broadway
Akron, OH 44325
United States

Richard S. Warr

North Carolina State University ( email )

BOX 7229
Raleigh, NC 27695-7229
United States
919-513-4646 (Phone)
919-515-6943 (Fax)

HOME PAGE: http://www4.ncsu.edu/~rswarr/

Jing Zhao (Contact Author)

Portland State University - The School of Business ( email )

631 SW Harrison St.
Portland, OR 97201
United States

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