Racial diversity of professionals and firm innovation: influence of racial diversity of managers

This study focuses on increasing the understanding of how racial diversity influences the innovation of a firm. Concentrating on the professionals as creative workers that provide direct knowledge input for innovation, we propose that racial diversity of professionals positively influences firm innovation. Moreover, we also provide a contingent perspective by considering the moderating effect of racial diversity of managers. This study presents a longitudinal analysis from 391organizations to investigate the relationship between racial diversity of professionals and innovation. We find that racial diversity of professionals affects firm innovativeness differently depending on (a) the nature of innovation (important patents versus patent quantity), and (b) the racial diversity of managers. Our results provide both research and managerial implications on leveraging valuable resources in diversity management. Keywords: racial diversity, innovation, knowledge creation