The Effect of Board Gender Diversity and Environmental Responsibility on Innovation: Evidence from the Top-Patenting Firms

Abstract

Today, firms face joint pressures to increase the representation of women at the highest levels of their organizations, and to be more environmentally responsible. Still, the impact of these movements on firm performance is less clear. Through the lens of the Attraction-Selection-Attrition (ASA) Cycle, this study looks at the impact of Board Gender Diversity (BGD) and Environmental Responsibility on Innovative Output as measured by patents. Using a longitudinal sample of the top-patenting firms at the United States Patent and Trademark Office, we find that both BGD and Environmental Responsibility lead to higher levels of Innovative Output, and BGD positively moderates the relationship between Environmental Responsibility and Innovative Output. This paper contributes to existing literature by highlighting the need to consider BGD and Environmental Responsibility at the same time when considering their implications on firm performance. We also expand the scope of the ASA Cycle to include overall firm performance with respect to innovation.