Diversity and Innovation : The Differential Role of Scope Versus Levels

We formulate a theory on the interplay between the scope and levels of board diversity and innovation to generate three main insights. First, we theorize that diversity in scope (gender, age, type of experience, and type of expertise) facilitates innovation, particularly in industries characterized as high-tech and male-dominated. Second, we theorize that diversity in levels (amount of expertise) is less important for innovation and, perhaps, potentially detrimental. Third, we theorize that firms with greater diversity of scope generate more value-enhancing innovation. Our first-ever empirical tests, based on large sample evidence from the world's leading patent producing nation – China – are largely consistent with these hypotheses