Women in top management teams and their impact on innovation

Abstract

In this study, we integrate insights from the literature on top management team (TMT) composition, gender diversity, and cumulative innovation, and examine how TMT gender diversity (or women in TMTs) impacts firm innovation. We analyze a panel of U.S. firms over the period 2005-2019, exploiting U.S. state-level variation in support policies protecting the rights of female workers. We find that greater TMT gender diversity increases the number of innovations but decreases their impact. Furthermore, greater TMT gender diversity narrows the breadth of search (search becomes more local). We illuminate the multifaceted innovation outcomes of genderdiverse TMTs and highlight the risk-reducing effects of female TMT members in innovation contexts. Our study provides opportune innovation insights that are much needed in the current era, with the increasing presence of female executives in TMTs.