Diversity and inclusion in the workplace and corporate innovation

Thomas Covington, Thanh Dat Le and Julie Ngo

Finance Research Letters, 2025, vol. 76, issue C

Abstract: We employ a novel D&I rating that captures employees’ perceptions of their firms’ D&I practices and find that firms with higher D&I ratings are more innovative. Using the Seventh Circuit Court ruling in 2013 as an exogenous shock to firms’ D&I practices, we show this relationship is causal. The effect of D&I on innovation is stronger in firms where employees are more important for the innovation process and in firms with larger workforces. Our findings highlight that fostering an inclusive work environment can enhance a firm’s innovative capacity, offering practical implications for both policymakers and corporate leaders.

Keywords: Diversity; Inclusion; D&I; Innovation; Glassdoor (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1544612325002028
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:76:y:2025:i:c:s1544612325002028

DOI: 10.1016/j.frl.2025.106938

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().