Open AccessBoard Composition and Innovation
Author(s) -
Zenu Sharma
Publication year - 2016
Publication title -
applied finance letters
Language(s) - English
Resource type - Journals
eISSN - 2253-5802
pISSN - 2253-5799
DOI - 10.24135/afl.v5i2.46
Subject(s) - diversity (politics) , business , quality (philosophy) , composition (language) , key (lock) , industrial organization , identity (music) , accounting , marketing , political science , philosophy , linguistics , physics , epistemology , acoustics , ecology , biology , law
Corporate boards make key economic and financial decisions. Diversity in the boardroom, on hand can lead to higher innovation by increasing interaction between heterogeneous agents; on the other hand it can lead to more conflict based on the predictions of social identity theory. In an examination of US firms from 1999 to 2006, this study finds that demographic diversity; directors’ individual characteristics and affiliation are associated with higher innovation in form of patents and quality of innovation in form of citations.