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Integrity, Creativity, and Corporate Culture

49 Pages Posted: 11 Mar 2016 Last revised: 31 Aug 2017

William David Grieser

Texas Christian University

Rachel Li

Michigan State University

Andrei Simonov

Michigan State University - Eli Broad Graduate School of Management; Gaidar Institute for Economic Policy; Centre for Economic Policy Research (CEPR); SITE

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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 David and Li, Rachel and Simonov, Andrei, Integrity, Creativity, and Corporate Culture (April 19, 2017). Available at SSRN: https://ssrn.com/abstract=2741049

William David Grieser (Contact Author)

Texas Christian University ( email )

Fort Worth, TX 76129
United States

Qingqiu Li

Michigan State University ( email )

Agriculture Hall
East Lansing, MI 48824-1122
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

Gaidar Institute for Economic Policy ( email )

3-5 Gazetny Lane
Moscow, 125009
Russia

Centre for Economic Policy Research (CEPR) ( email )

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

SITE ( email )

P.O. Box 6501
S-113 83 Stockholm, 11383
Sweden

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