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Title: Board diversity and R&D investment
Authors: Midavaine, Jeanelle
Dolfsma, Wilfred
Aalbers, Rick (H.L.)
Keywords: Board diversity
Board decision making
Issue Date: 2016
Publisher: © Emerald
Citation: MIDAVAINE, J., DOLFSMA, W. and AALBERS, R., 2016. Board diversity and R&D investment. Management Decision, 54(3), pp. 558-569
Abstract: Purpose – 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.
Description: 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.
Version: Accepted for publication
DOI: 10.1108/MD-09-2014-0574
URI: https://dspace.lboro.ac.uk/2134/20874
Publisher Link: http://dx.doi.org/10.1108/MD-09-2014-0574
ISSN: 1355-252X
Appears in Collections:Published Articles (Loughborough University London)

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