Do Pro-Diversity Policies Improve Corporate Innovation?

Financial Management, Forthcoming

58 Pages Posted: 19 Jan 2018

See all articles by Roger C. Mayer

Roger C. Mayer

University of Akron

Richard S. Warr

North Carolina State University

Jing Zhao

Portland State University - The School of Business

Date Written: December 18, 2017

Abstract

Using new product announcements, patents, and patent citations as measures of corporate innovation, we find that corporate policies that promote more pro-diversity cultures, specifically treatment of women and minorities, enhance future innovative efficiency. This positive effect is stronger during economic downturns and in firms that are more innovative, value intangibles and human capital more highly, have greater growth options, have higher cash flow, and have stronger governance. Pro-diversity policies also increase firm value via this stimulating effect on innovative efficiency. Our results suggest a channel through which workforce diversity may enhance firm value.

Suggested Citation

Mayer, Roger C. and Warr, Richard S. and Zhao, Jing, Do Pro-Diversity Policies Improve Corporate Innovation? (December 18, 2017). Financial Management, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3103322

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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