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JOCM
35,8 Boosting innovation through
gender and ethnic diversity
in management teams
54 Cristina Quintana-Garc
ıa and Macarena Marchante-Lara
Department of Economics and Business Administration, University of Malaga,
Received 5 May 2021
Revised 6 April 2022
Malaga, Spain, and
Accepted 26 May 2022 Carlos G. Benavides-Chic
on
Department of Applied Economics (Economic Structure), University of Malaga,
Malaga, Spain

Abstract
Purpose – This study investigates the link between diversity in management and CEO positions and firm
innovation. The purpose of this paper is to examine the effect that women and ethnic diversity in management
and CEO positions have on the development of outstanding innovation in firms.
Design/methodology/approach – This paper conducts an empirical analysis to investigate these
relationships over time using a large panel database of 1,345 publicly US traded firms.
Findings – Results revealed that gender and ethnic diversity at all levels of management exhibited a robust
positive association with superior innovation competence. This finding remains robust when alternative
proxies for innovation are employed. In contrast, the authors found that women and ethnic minorities at the
CEO level had no significant influence.
Originality/value – Considering an output measure of innovation, the authors explore the effect of gender
and ethnic minority groups in management positions as well as at the CEO level, rather than focusing only on
top management teams or board of directors. The authors offer new practical insights regarding the manager
selection process that are also useful to support public policy initiatives.
Keywords Diversity, Gender, Ethnicity, Innovation, Minority
Paper type Research paper

Introduction
In the current competitive environment and due to the pace of technological changes,
innovation has become crucial for an organization’s sustainable growth. Research has
supported that innovation is an important predictor of firm performance (Bowen et al., 2010;
Mayfield et al., 2020). Prior research suggests that managers’ skills and characteristics are
key factors that enhance innovation processes. Their demographic profile serves as a proxy
for their perspectives, networks and affiliations (Richard, 2000).
We explore demographic diversity by focusing on gender and ethnicity. Figures show
that the US workforce is becoming more diverse, and women are expected to continue to gain

© Cristina Quintana-Garc
ıa, Macarena Marchante-Lara and Carlos G. Benavides-Chic
on. Published by

Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY
4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for
both commercial and non-commercial purposes), subject to full attribution to the original publication
and authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/
legalcode
Journal of Organizational Change The authors acknowledge the financial support of the COMPSOS Project (PID 2020-117313RB-I00),
Management funded by MCIN/AEI/10.13039/501100011033 and of the SOSTEMPRE (B-SEJ-682-UGR20) Project,
Vol. 35 No. 8, 2022
pp. 54-67 funded by PROGRAMA OPERATIVO FEDER ANDALUCIA 2014–2020. Additionally, the study has
Emerald Publishing Limited been partially supported by Santander Center for Corporate Social Responsibility at the University of
0953-4814
DOI 10.1108/JOCM-05-2021-0137 M
alaga (Spain).
share, rising from 46.8% of the workforce in 2014 to 47.2% in 2024. Similarly, regarding Innovation and
ethnic diversity, by 2024, less than 60% of the labor force is likely to define itself as “white diversity in
non-Hispanic” (Buckley and Bachman, 2017). Furthermore, over the past decades, executive
and director levels are increasingly characterized by gender diversity (Vinnicombe et al.,
management
2008) and ethnic diversity (Zweigenhaft and Domhoff, 2011). However, both groups remain teams
underrepresented in management positions and therefore, legislation and diversity initiatives
have been adopted worldwide (Kurtulus, 2016; Miller and Triana, 2009). Hence, managing
such diversity is a topic of great importance for firms. 55
At the management or board level, some studies explore how gender and/or ethnic
diversity impacts several measures of performance and the empirical evidence is
contradictory (e.g. Adams and Ferreira, 2009; Carter et al., 2010; Kirsch, 2018). When it
comes to examining the effect on innovation, the literature is scarce. A few studies analyze
the relationship between diverse top management teams (TMT) and innovation
performance (Li et al., 2016; Van der Vegt and Janssen, 2003). These studies usually
contemplate demographic attributes, focusing on diversity related to functional
background or work experience. Focusing on TMT, Dezs€o and Ross (2012) find that
female representation improves firm performance but only if a firm’s strategy is oriented
toward innovation. This study contemplates the ratio of research and development (R&D)
expense to assets as a proxy of innovation intensity. More recently, a study within the US
healthcare industry concludes that when TMT size is considered, diverse TMTs (in terms of
gender diversity and compensation equality) significantly influence the innovation of the
firm (Bass, 2019). Similarly, studying board diversity, Miller and Triana (2009) find a
positive relationship between female and ethnic representation and innovation. They also
use an input measure of innovation.
Our research makes a threefold contribution. Firstly, we analyze diversity in
management positions as well as at the CEO level, rather than focusing only on TMT or
board of directors. In this study, management positions refer to all line positions with profit-
and-loss responsibilities that have to make decisions and are responsible for achieving the
firm’s main goals (Hogan and Huerta, 2019). Innovation encompasses changes and a
complex coordination across multiple functional areas, reason why the management team
may play a more important role than members of the board of directors. In turn, CEOs hold
the most powerful position in most firms and significantly influence an environment that
stimulates or hinders innovation (Makri and Scandura, 2010; van de Wal et al., 2020).
Previous studies investigating CEO characteristics found a positive effect on innovation
(Arena et al., 2018; Galasso and Simcoe, 2011). However, when it comes to the interaction
between women and ethnic minority-status CEOs and innovation there is a lack of empirical
evidence.
Secondly, we test the effect of gender and ethnic minority groups at all those levels of
management. Such diversity lies in a greater range of task-relevant information and
expertise. We posit that different backgrounds, leadership styles and cognitive resources
foster the exposure of decision-makers to divergent perspectives that result in higher
innovation (Bantel and Jackson, 1989; van Knippenberg et al., 2004).
Finally, we consider an output measure of innovation, which shows the result of the whole
process of innovation instead of an input measure. For instance, the use of R&D expenses, a
widespread measure of innovation, has several shortcomings as they do not comprise all
aspects of innovation, and thus may underestimate a firm’s innovative efforts (Hashi and
Stojci
c, 2013).
The remainder of the paper proceeds as follows. We begin by describing the theoretical
framework and hypotheses. Following this, measures, empirical analysis, and results
are presented. Finally, we discuss the contributions, limitations and conclusions of
our study.
JOCM Theoretical framework
35,8 Theoretical perspectives on the diversity-innovation relationship
Diversity refers to differences between individuals on any attribute that may lead to the
perception that another person is different from oneself (van Knippenberg et al., 2004;
Williams and O’Reilly, 1998). The effects of diversity can be perceived negatively (“diversity-
as-process-loss”) or positively (“value-in-diversity”). According to the social categorization
theory and research on similarity/attraction (Williams and O’Reilly, 1998), group-level
56 diversity may lead to lower trust and poor communication because of language barriers,
misunderstandings or discriminatory attitudes. Work group members may be more
positively inclined toward their group, giving rise to problematic inter-subgroup relations.
This situation could limit cooperation and lead to fewer and lower solutions (Alesina and La
Ferrara, 2005; Nathan, 2015). Complementary, the social impact theory predicts that
individuals who have majority status may exercise a disproportionate influence in group
decisions (Carter et al., 2010).
From the information/decision-making perspective, on the other hand, diverse groups
outperform homogeneous groups. Individuals may benefit from group-level cognitive
diversity if this brings a richer mix of ideas and perspectives (Nathan, 2015). In general, more
heterogeneous groups have different perspectives and knowledge, distinct and non-
redundant skills and abilities. This allows a more comprehensive set of solutions to be
considered and to debate one another’s points of view more dynamically which can lead to
higher quality decisions (van Knippenberg et al., 2004).
In our work, in line with the information/decision-making perspective, we support the idea
that diversity yields positive organizational outcomes. The exposure to diverging
perspectives may lead to more creative and innovative solutions (Bantel and Jackson,
1989). Although based on demographic differences such as gender and ethnicity, group-level
diversity may produce net positive effects on group performance to the extent that
performance requires information processing, creative and innovative idea generation (van
Knippenberg et al., 2004). That is, diversity benefits group performance when complex and
non-routine information processing are necessary. This is the case of TMT where tasks have
a high information-processing component (Dezs€o and Ross, 2012), especially if the tasks are
related to innovation. Innovation is an interactive process and diversity among those who
interact affects the way knowledge is generated (Østergaard et al., 2011). Homogeneous
groups may actually hamper innovation because high levels of cohesion produce an
inclination toward conformity (Miller and Triana, 2009).
We also posit that promoting diversity at all management levels improves communication
and reduces language barriers. A comprehensive vertical management of diversity may
create an inclusive culture that also influences the workforce, guaranteeing a positive impact
on the strategy and all the stages of the innovation process. Diversity at the top of corporate
hierarchy indicates that the culture of the firm is committed to the advancement of diversity
at all levels (Dezs€o and Ross, 2012), enhancing the organizational commitment in lower-level
managerial positions. Such inclusive culture may produce net positive effects regarding the
generation of novel solutions (Angle, 1989).
Furthermore, firms may increase the number of women and other minorities to better
match the demographic characteristics of their customers. Demographic diversity allows
firms to succeed by giving them the skills needed to create or adapt goods and services to
market needs (Richard, 2000). Such diversity has also been linked with differences in social
capital and network resources. When firms have diverse and non-redundant ties, they are
better able to innovate (Burt, 1997). Rodan and Galunic (2004), found that heterogeneous
managerial knowledge from network structures positively impacts innovation performance.
Additionally, a supportive organization culture based on a diverse environment helps
attract high-quality jobs applicants generating higher creativity (Catanzato et al., 2010),
and hence improving innovation capabilities. In this respect, Mayer et al. (2018) find that the Innovation and
presence of corporate policies supporting diversity increases innovative efficiency. diversity in
management
Gender and ethnic minorities in management and innovation teams
A “minority group” is “any group of people who because of their physical or cultural
characteristics, are singled out from the others in the society in which they live for
differential and unequal treatment” (Wirth, 1945). Minority can be considered a proxy for 57
cultural background, and minority diversity may broaden the viewpoints in the firm
(Richard, 2000). Considering the purpose of our research, women and ethnic minorities in
management and CEO positions can be considered occupational minorities (Cook and
Glass, 2014).
Regarding women, they present an interactive leadership style that emphasizes inclusion,
fosters participation (Kark, 2004) and shares power by keeping open communication
channels with their subordinates (Dezs€o and Ross, 2012). Empowering and participatory
leadership styles are key drivers of motivation and creativity (Zhang and Bartol, 2010).
Stakeholder theory and gender socialization theory offer additional reasons for the
assumption that gender diversity will positively affect innovation. Stakeholder theory
asserts that a firm’s responsibilities extend beyond shareholders since it has relationships
with multiple stakeholders (Freeman, 1994). Gender socialization theory proposes that
women are typically socialized into communal traits (i.e., caring and understanding) whereas
men are socialized into agentic traits (competitive, determined). As a result, women are more
socially oriented and empathetic than men (Eagly, 1987). Subsequently, a greater female
presence at management level leads to more sensitivity toward different opinions and to the
making of decisions that consider the interest of a broader range of stakeholders. Research
analyzing how board gender composition affects organizational outcomes, provides
empirical evidence of this statement (Galbreath, 2018).
Regarding ethnicity, there is some evidence to support a positive relationship between
ethnic diversity and innovation. A study by McLeod et al. (1996) showed that ideas produced
by ethnically diverse groups were judged to be of higher quality than those produced by
homogeneous groups. Several works support that ethnic diversity predicts innovation and
patenting (Nathan, 2015; Østergaard et al., 2011).
In sum, gender and ethnic diversity may improve innovation capability. Different
backgrounds, cognitive resources and life experiences can help to reach the acquisition of
common goals, which in turn increase the probability of obtaining innovative outcomes
(Smith-Doerr, 2004). Therefore, we pose the following hypothesis:
H1. Women and ethnic minorities in management positions positively influence
innovation.
Regarding CEO leadership and innovation, strategic leadership theory (Hambrick and
Mason, 1984) argues that companies are a reflection of their TMT and in particular, CEOs that
have the ultimate responsibility of setting the strategic direction of a firm. CEOs significantly
influence the creation of an environment that encourages or hampers innovation (Makri and
Scandura, 2010; Wong et al., 2017). R&D spending is one of the most fundamental investment
decisions made by top managers (Barker and Mueller, 2002). Thus, characteristics of a CEO
matter greatly in determining a firm’s effort to conduct innovation activity.
We posit that women and ethnic minorities at the CEO level may facilitate the innovation
processes due to their specific professional and educational background (van de Wal et al.,
2020). For instance, Zweigenhaft and Domhoff (2011) study of women and ethnic minorities
CEOs in Fortune 500 concluded that they tend to reach the corporate power with consistently
better qualifications than white men.
JOCM Empirical research supported that the educational and professional backgrounds of CEOs
35,8 has proven to be important in their receptivity to innovative activities. More qualified
executives tend to have greater cognitive complexity to absorb new ideas, which therefore
increases the probability of accepting innovations (Dalziel et al., 2011). Moreover, in corporate
R&D decisions, a CEO’s career experience in various functions is important. Lin et al. (2011)
showed that CEOs professional and educational backgrounds are positively associated with
corporate innovation.
58 A few empirical studies explore the relationship between CEO diversity and innovation
outcomes. Kisfalvi and Pitcher (2003), argued that diverse TMT may not be enough to
influence performance outcomes and provided evidence that a CEO’s character has a critical
impact on organizational processes that affect innovation. Accordingly, we formulate the
following hypothesis:
H2. Women and ethnic minorities at the CEO level positively influence innovation.

Methodology
Sample and data collection
The research setting was a data set of US publicly traded firms. This represents a suitable
venue in which to study the outcomes of women and ethnic minorities in management
positions. The Equal Employment Opportunity law in the US led to the normative
acceptance of diversity (Zhang, 2020) and influenced firms’ willingness to hire
underrepresented groups, such as women or ethnic minorities, in management positions.
For instance, regarding women, the last decade has seen an increasing number of female
executive officers and directors serving in US public corporations (Liu, 2018). Long-
term trends also show that ethnic minority shares of employment and corporate boards
in large US firms have been rising in the last decades (Abebe and Dadanlar, 2021;
Kurtulus, 2016).
We collected information regarding innovation, women and ethnic minorities in
management and at the CEO level, and control variables related to corporate social
responsibility (CSR) from MSCI ESG KLD STATS. The validity and reliability of this
database have been established by various researchers (e.g., Hart and Sharfman, 2015;
Ozdemir et al., 2022; Semenova and Hassel, 2015). This data set uses a proprietary system to
evaluate corporations’ ESG performance. MSCI ESG research employs a global team of over
140 experienced research analysts to assess how well companies manage their
environmental, social and governance (ESG) performance indicators. Each indicator is
scored by a binary rating. If the company meets the assessment criteria established for an
indicator, then it is signified with a 1.
In addition, we obtained data regarding some control variables (R&D intensity, firm size
and high-technology firms) from Compustat.
In MSCI ESG KLD STATS, information regarding innovation is available between 1991
and 2009. Therefore, this is the period considered in our longitudinal study. Our final sample,
after considering the one-year lag in our independent and control variables, is an unbalanced
panel of 1,345 unique US firms during the period 1991–2009 (total number of
observations 6,455).

Measures
Dependent variable. Our dependent variable “innovation” is measured by the reported
indicator that scores 1 if the company is a leader in its industry for R&D, especially by
bringing notably innovative products to the market. Therefore, we use an output measure of
innovation. Cook and Glass (2015) carried out a validation analysis of this item, and their Innovation and
random check of the product innovation measure affirmed its veracity. diversity in
Independent variable. The measures of the independent variables are collected from the
MSCI ESG KLD STATS data set where women and ethnic minorities are integrated into
management
single indicators. teams
“Women and ethnic minorities in management positions” is measured through the
dichotomous indicator called “representation” offered by the mentioned data set. This is
reported as 1 if the company has made notable progress in the promotion of women and 59
ethnic minorities, particularly to line positions with profit-and-loss responsibilities in the
corporation. This definition implies that all levels of management are considered, and that
there has been an outstanding improvement in the representation of women and ethnic
minorities in such levels.
The second independent variable, “women and ethnic minorities at the CEO level”, is a
dummy variable that takes value 1 if the company’s chief executive officer is a woman or a
member of an ethnic minority group.
We assume that the accumulated variety of knowledge and experiences from the
demographic diversity of managers influences the subsequent capacity for achieving
innovation. Thus, the independent variables are lagged for one year.
Control variables. We include several control variables that can be considered
determinants of innovation performance: R&D intensity, firm size, high-technology
companies and two composite measures related to CSR.
The intensity of research effort is used as a proxy for the level of innovation (e.g.,
Baumann and Kritikos, 2016). We estimate “R&D intensity” through the ratio of annual R&D
expenses over annual revenues. We use the number of employees to control for “firm size”,
which is usually associated to innovation outcomes (Vaona and Pianta, 2008). The logs of
these two variables were taken to account for their skewed distributions. Following the same
reasoning for the independent variables, these two control variables are lagged for one year.
We also include the dummy variable “high-technology firm” to control whether or not a
company belongs to a high-technology sector characterized by rapid and continuous changes
in products, markets and competitive environments (Makri and Scandura, 2010). The high-
technology sectors identified are derived from the definition given by the OECD (2011).
Additionally, companies highly committed to CSR maintain better relationships with
stakeholders that give them more opportunities to innovate (Gonz
alez-Ramos et al., 2014). We
construct two control variables regarding CSR: CSR strengths and CSR concerns, since they
are considered two theoretically separate constructs that should be treated this way
empirically. Based on previous literature, we develop this variable as a composite CSR score
by assigning equal importance, and thus equal weights, to different areas of the MSCI ESG
KLD STATS database (Ioannou and Serafeim, 2015). “CSR strengths” is the equally weighted
sum of the positive screens, categorized as strengths for firm i in year t adjusted by the mean
of strengths average across all firms in the sample on year t. “CSR concerns” is measured
following the same method but using the negative screens. These control variables are lagged
for one year, which reduces concerns related to reverse causality.
Finally, a dummy variable for each year was included to control factors that are the same
for all cross-sectional units but vary over time (e.g., economic magnitudes).

Results
Regarding our dependent variable (Table 1), 322 out of 1,324 companies (24.32%) show an
outstanding innovation performance since such a variable takes the value 1 at least once in
the period considered. The mean number of employees is 21,445. In our sample, there are 570
high technology companies, 125 of which have outstanding innovative behavior.
 60
35,8
JOCM

Table 1.
Summary of
descriptive statistics
Std.
Variable Mean Dev. 1 2 3 4 5 6 7 8

1 Innovation 0.06 0.23 1.00

2 Women and ethnic minorities in management 0.22 0.41 0.08*** 1.00
positions (t
1)
3 Women and ethnic minorities at the CEO level (t
1) 0.04 0.21 0.00 0.08*** 1.00
4 R&D intensity (log) (t
1)
3.16 1.38 0.10*** 0.07*** 0.08*** 1.00
5 Firm size (log) (t
1) 1.58 1.81 0.10*** 0.14***
0.06***
0.39*** 1.00
6 High-technology firm 0.39 0.48 0.05*** 0.02 0.03*** 0.45***
0.21*** 1.00
7 CSR strengths (t
1) 1.02 1.44 0.29*** 0.41*** 0.16*** 0.03* 0.44***
0.02 1.00
8 CSR concerns (t
1) 1.01 1.34 0.05*** 0.04***
0.03**
0.24*** 0.42***
0.14*** 0.40*** 1.00
Note(s): n 5 6,455 observations; number of groups (firms) 5 1,345. ***p < 0.001; **p < 0.01; *p < 0.05
 Concerning the representation of women and ethnic minorities, 844 companies (63.74%) Innovation and
have made notable progress in the promotion of such groups to all levels of management. diversity in
However, a lower percentage of firms (23.71%) have a female or an ethnic minority-status
CEO, which is consistent with the underrepresentation of these groups at such a level in most
management
sectors. teams
Given the binary character of the dependent variable, a probit model is specified. To
address concerns of unobserved heterogeneity, we employ a random-effects panel probit
model instead of a fixed-effects model since our sample is drawn from a large population. In 61
this case it is appropriate to model the individual specific constant terms as randomly
distributed across cross-sectional units (Greene, 2002).
We use a hierarchical regression analysis (Table 2). We enter the control variables in the
first step (model 1). In the second step, women and ethnic minorities in management and CEO
positions are added (model 2). Thus, model 2 tests H1 and H2. Considering the Wald test,
models 1 and 2 are significant at the 1% level.
We tested our data for multicollinearity. Individual VIF values greater than 10, combined
with average VIF values greater than 6, indicate a multicollinearity problem (Cohen et al.,
2003). In models 1 and 2, the highest individual VIF score was 7.10; the mean of VIF was 3.18
and 3.03 in models 1 and 2, respectively. All these values are within acceptable parameters.
H1 is supported. Promoting gender and ethnic diversity at all levels of management is
found to be a positive and significant determinant of the innovation capacity (b 5 0.316,
p < 0.05). Nevertheless, H2 is not supported. Such representation at the CEO level does not
have a significant influence on fostering innovation performance (b 5 0.259, p > 0.05). The
lack of significance may be due to the relatively low number of CEOs that are women or
members of an ethnic minority group in our sample.
Regarding control variables, the main finding is the significance of R&D intensity and
both variables regarding CSR (Table 2). R&D intensity was found to have a positive and
significant influence on innovation. Socially responsible behavior has a positive and
significant effect on innovation competence. The adoption of CSR practices to respond to
changes in customer needs and environmental and social challenges contributes to
innovative outcomes (Porter and Kramer, 2006). Interestingly, a firm’s CSR concerns

Innovation
Model 1 Model 2

Independent variables
Women and ethnic minorities in management positions (t
1) 0.316* (0.156)
Women and ethnic minorities at the CEO level (t
1) 0.259 (0.306)
Control variables
R&D intensity (log) (t
1) 0.448*** (0.122) 0.445*** (0.120)
Firm size (log) (t
1) 0.099 (0.077) 0.110 (0.077)
High-technology firm 0.319 (0.262) 0.311 (0.260)
CSR strengths (t
1) 0.305*** (0.046) 0.287*** (0.047)
CSR concerns (t
1)
0.213** (0.071)
0.197** (0.071)
Year dummies Included Included
Constant
4.114*** (0.375)
4.194*** (0.377)
Observations 6,455 6,455
Rho 0.863 0.863 Table 2.
Wald test of the full model (Chi-square) 89.19*** 94.41*** Results of probit
Note(s): Standard errors are in parentheses regression analysis
***p < 0.001; **p < 0.01; *p < 0.05 predicting innovation
JOCM represent value-destructing activities (Ioannou and Serafeim, 2015) that reduce the ability to
35,8 hold a leadership position in innovation.

Robustness test
We modified the models considering R&D intensity with and without the logarithmic
transformation as a dependent variable. R&D intensity has been used as a proxy of
62 innovation in some works, as such measure reflects decisions made by managers to allocate
resources to innovation (Dezs€o and Ross, 2012; Miller and Triana, 2009). Since both measures
regarding R&D intensity are continuous, the method used for this analysis was ordinary least
squares (OLS) regression.
Results are consistent with our main findings (Table 3). In both models, female and ethnic
minority managers positively influence innovation although such representation at the CEO
level is found nonsignificant. Regarding control variables, the integration of CSR into a firm’s
strategies benefits innovation competence, and socially irresponsible actions have a negative
effect. Firm size and belonging to a high-technology sector are also factors that significantly
explain innovation intensity.

Discussion and conclusion

In this article, we explore the effect that women and ethnic minorities in management and at
the CEO level have on the ability to develop outstanding innovation performance. By
studying a panel data of publicly traded US companies, we confirmed that gender and ethnic
diversity in management positions produce net positive effects on innovation. This finding is
coherent with the information/decision-making perspective (Dezs€o and Ross, 2012; van
Knippenberg et al., 2004). The study is also consistent with the assumption that by better
utilizing the knowledge, competences of women and ethnic minorities at different
management levels, firms can become more innovative (Cook and Glass, 2015; Dezs€o and
Ross, 2012).
However, we did not find a significant relationship between women and ethnic minority-
status CEOs and innovation. Our findings extend the work done by Lin et al. (2011) in
manufacturing firms in China. This counterintuitive result is consistent with the literature on
tokenism that provides evidence that ethnic minority and women in high-power positions are

R&D intensity (log) R&D intensity

Independent variables
Women and ethnic minorities in management positions (t
1) 0.036* (0.014) 0.005** (0.002)
Women and ethnic minorities at the CEO level (t
1)
0.007 (0.805)
0.004 (0.040)
Control variables
Firm size (log) (t
1)
0.111*** (0.011)
0.014*** (0.001)
High-technology firm 1.182*** (0.070) 0.079*** (0.006)
CSR strengths (t
1) 0.014** (0.005) 0.001** (0.000)
CSR concerns (t
1)
0.038*** (0.005)
0.001y (0.000)
Year dummies Included Included
Constant
3.375*** (0.047)
Observations 6,451 6,455
Rho 0.941 0.882
Table 3. Wald test of the full model (Chi-square) 559.11*** 335.61***
OLS regression results Note(s): Standard errors are in parentheses
on R&D intensity ***p < 0.001; **p < 0.01; *p < 0.05; yp < 0.10
discouraged from engaging in diversity-valuing behavior in order to avoid negative Innovation and
stereotypes and impede the advancement of their fellow colleagues (Hekman et al., 2017). diversity in
Results also show that a high commitment to CSR benefits innovation. CSR is an
opportunity to reconfigure the competitive landscape as well as to develop distinctive
management
resources and competences (Husted and Allen, 2007). Socially responsible practices might teams
provide opportunities for innovation using economic, social and environmental drivers to
create new products and new market space among other forms of innovation.
Complementary, controversial practices are found detrimental to innovation competence. 63
Most of the prior work on the influence of CSR on innovation has focused only on the effects of
a socially responsible behavior (Hull and Rothenberg, 2008; Husted and Allen, 2007). This
study contributes to this literature by considering the effects of negative business practices
and by treating CSR strengths and concerns separately in the analysis of their influence on
innovation. Future research might deepen the analysis into the relationships between gender
and ethnic diversity, CSR and innovation.
From a theoretical viewpoint, our findings are consistent with arguments linked to the
value-in-diversity perspective that makes the business case for diversity. Consequently, we
extend the existing literature that tested the value-in-diversity related to business success in
terms of several measures of financial performance such as return on assets, Tobin’s Q or
relative profits (Carter et al., 2010; Herring, 2009). Our study also offers practical implications.
Regarding the manager selection process, arguments in favor of increased diversity
traditionally stem from concerns about discrimination and moral justice. We provide
evidence to support that the decision to appoint women and ethnic minorities to managerial
positions should also be based on economic criteria, particularly innovation outcomes, one of
the keys to the long-term viability of organizations. We provide new insights to support
public policy initiatives for positive discrimination of women and ethnic minorities on
leadership positions. Institutional pressures lead to the appointment of female directors on
the board. Several countries, such as Norway, Spain and France, have adopted legislative
initiatives (Rao and Tilt, 2016). However, management teams may play a more important role
in influencing innovation processes. Hence, we offer evidence to help direct public efforts in
promoting gender and ethnic diversity in all management levels, and not just board of
directors.
Finally, we are aware of the limitations of this study. Our sample includes different size
companies belonging to different sectors. Further research could extend this study to other
countries and include private companies to obtain generalizable conclusions. Additionally,
the paper relies on secondary data. Our measures of diversity gathered from the employed
database include the presence of women and/or ethnic minorities in management and at the
CEO level, but we cannot disentangle the individual effect of each demographic group on
innovation. Moreover, we cannot examine if a female CEO belonging to a minority ethnicity
has a doubled effect or just a higher effect. Future analyses using qualitative research and
primary sources could explore the independent effect of each demographic group, the added
effect derived from being a CEO with that double attribute and examine additional
information about managers and CEOs regarding human capital variables. Further research
could also examine the impact of the promotion of gender and ethnic diversity in both
management and employees.

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About the authors

Cristina Quintana-Garc
ıa is a professor of management at the University of Malaga
(Spain). She is director of Santander Center for Corporate Social Responsibility in the
mentioned University, and of the Andalusian Research Group “Technological
Innovation, Quality and Corporate Social Responsibility” (SEJ-414). She has been
visiting scholar, among others, at London Business School (2016) and the School of
Business of the Stanford University (2018). She develops studies regarding innovation,
social responsibility and gender diversity and inequality in the labor market. The
results from her research have been published in international journals and conference
proceedings.
Macarena Marchante-Lara is an industrial engineer and holds a Master’s degree in
Occupational Health and Safety and a Ph.D. from the University of Malaga. She is an
associate professor of Management at the University of Malaga (Spain). She is a
member of the Andalusian Research and Technological Development Group
“Technological Innovation, Quality and Corporate Social Responsibility” (SEJ-414).
She is a researcher and academic collaborator of the Santander Center for Corporate
Social Responsibility of the University of Malaga (Spain). Her research focuses on
quality, environmental management, social responsibility and gender diversity.
Macarena Marchante-Lara is the corresponding author and can be contacted at: mmarchante@uma.es
Carlos G. Benavides-Chic
on holds a PhD in Economics (hons) and is a graduated in
Business Management (hons) and in Economics (hons) from the University of Malaga
(Spain). He is an associate professor of Applied Economics at the University of Malaga.
He is a member of the Andalusian Research and Technological Development Group
“Tourism Economics: labor market and environment” (SEJ-139) and the Santander
Center for Corporate Social Responsibility of the University of Malaga. His research
focuses on topics related to productivity, the labor market, CSR and economics of
innovation.

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