Dolfsma_board diversity innovation (Management Decision_Sept2015)_Clean.pdf (183.54 kB)
Board diversity and R&D investment
journal contribution
posted on 2016-04-12, 10:56 authored by Jeanelle Midavaine, Wilfred Dolfsma, Rick (H.L.) AalbersPurpose – The purpose of this paper is to investigate the effect of board diversity on the extent to which firms invest in R&D.
Design/methodology/approach – empirical analysis of 175 firm-year observations for Fortune 500 firms in high tech industries and the four different indications of diversity of their boards.
Findings – Boards that can tap into a diversity of sources for information can be expected to make better decisions. Diversity in a team and a board can, however, also impede team performance. Measuring the diversity of boards in four different ways, two of which are person-related (age and gender) and two information-based (education and tenure), we analyze which kind of diversity ensures that the firm governed by a board will invest more R&D. We find, unexpectedly, that tenure diversity leads to firms being less innovative, while education diversity and gender diversity make firms more innovative. Gender diversity positively moderates education diversity as well, strengthening the effect found. We discuss the implications of our findings for management and society.
Originality/value – This study conceptually differentiates between 2 information-based and 2 person-related indications of board (team) diversity, theoretically elaborate on the effects they have, and provide empirical evidence for their effects.
History
School
- Loughborough University London
Published in
Management DecisionVolume
54Issue
3Citation
MIDAVAINE, J., DOLFSMA, W. and AALBERS, R., 2016. Board diversity and R&D investment. Management Decision, 54(3), pp. 558-569Publisher
© EmeraldVersion
- AM (Accepted Manuscript)
Publisher statement
This work is made available according to the conditions of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) licence. Full details of this licence are available at: https://creativecommons.org/licenses/by-nc-nd/4.0/Acceptance date
2016-01-27Publication date
2016Notes
This paper was published in the journal Management Decision and the definitive published version is available at http://dx.doi.org/10.1108/MD-09-2014-0574.ISSN
1355-252XPublisher version
Language
- en
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