Empirical Analysis Of The Impact Of Board Structure Diversity On Company Innovation Performance

This paper examines the impact of board structure diversity on firms innovation performance through panel regressions for A-share listed firms in China from 2008 to2021.The results show that:(1)Board structure diversity significantly contributes to the improvement of firms’ innovation performance.(2)The reason why diversity in board structure adds impetus to firms’ innovative R&D activities is that diversity in board membership provides oversight,advice,and resources to firms,thus contributing to their innovative performance.Heterogeneity tests reveal that,all else being equal,the positive effect of board structure diversity(1)on firm innovation performance is more pronounced in non-state owned firms.(2)The positive effect of board structure diversity on firm innovation performance is more significant in non-high-tech firms.(3)In the eastern region,it is more likely to promote the innovation performance of firms.(4)In firms with low shareholding concentration,it is more likely to promote the innovation performance of firms.(5)In firms with low shareholding of institutional investors,it is more likely to promote the innovation performance of firms.In further analysis,this paper analyzes the transmission mechanism of board structure diversity on firms’ innovation performance in terms of the percentage of R&D personnel and the degree of power concentration.The results show that the diversity of board structure strengthens the percentage of R&D personnel and decreases the degree of power concentration,thus increasing the innovation performance of the firm.For possible omitted variables and reverse causality issues,this paper applies the instrumental variables approach in the endogeneity test section.In the robustness testing section,this paper adopts the methods of replacing the explanatory variables,adjusting the scope of firms covered by the sample,adjusting the time span of the sample,and further breaking down the board structure diversity and firm innovation performance to enhance the reliability of the study findings,respectively.All the robustness tests are consistent with the results of the main regression model,and such consistency suggests that board structure diversity can indeed contribute to the improvement of firm innovation performance to some extent.The core contributions of this paper are:(1)Innovation in research perspective:the innovation performance of firms is measured by the number of patent citations from the perspective of innovation quality,which leads to the conclusion that the substantive innovation capability of firms can be effectively improved.(2)Innovation in mechanism testing: this paper further investigates the transmission mechanism through which the diversity of board structure acts on firms’ innovation performance,and finds that strengthening the diversity of board structure strengthens the proportion of R&D personnel and declines the concentration of power,thus improving firms’ innovation performance.