Integrity, Creativity, and Corporate Culture

49 Pages Posted: 11 Mar 2016 Last revised: 5 Dec 2017

See all articles by William Grieser

William Grieser

Texas Christian University

Rachel Li

University of Alabama - Department of Economics, Finance and Legal Studies

Andrei Simonov

Michigan State University - Eli Broad Graduate School of Management; Russian Presidential Academy of National Economy and Public Administration (RANEPA); Centre for Economic Policy Research (CEPR)

Date Written: April 19, 2017

Abstract

We highlight a potential trade-off between integrity and innovation in corporate culture. In particular, cultures that neglect integrity are associated with a greater probability of SEC enforcement actions for accounting misstatements, lower corporate ethics ratings by external analysts, and greater tax-avoidance. However, firms that score lower on measures of integrity within a given industry also have higher research and development output, more patents and patent citations, and greater patent diversity. Moreover, post-takeover research productivity of inventors decreases (increases) when they are merged into cultures with relatively higher (lower) scores on integrity. These results provide a potential explanation for the difficulty that firms have in sustaining integrity as a key corporate value.

Keywords: Corporate culture, Integrity, Creativity, R&D

JEL Classification: M14, G03

Suggested Citation

Grieser, William and Li, Qingqiu and Simonov, Andrei, Integrity, Creativity, and Corporate Culture (April 19, 2017). Available at SSRN: https://ssrn.com/abstract=2741049 or http://dx.doi.org/10.2139/ssrn.2741049

William Grieser (Contact Author)

Texas Christian University ( email )

Fort Worth, TX 76129
United States

Qingqiu Li

University of Alabama - Department of Economics, Finance and Legal Studies ( email )

P.O. Box 870244
Tuscaloosa, AL 35487
United States

Andrei Simonov

Michigan State University - Eli Broad Graduate School of Management ( email )

645 N. Shaw Lane, 321 Eppley Center
East Lansing, MI 48824-1122
United States

HOME PAGE: http://www.andreisimonov.com

Russian Presidential Academy of National Economy and Public Administration (RANEPA) ( email )

Vernadskogo Prospect 82
Moscow, 119571
Russia

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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