Employment Nondiscrimination Acts and Corporate Innovation
Date of Issue2016
College of Business (Nanyang Business School)
We show that U.S. state-level employment nondiscrimination acts (ENDAs)—laws that prohibit discrimination based on sexual orientation and gender identity—spur innovation. We find a significant increase in patents and patent citations for firms headquartered in states that have passed ENDAs relative to firms headquartered in states that have not. This result is more pronounced for firms that previously have not implemented pro-gay nondiscrimination policies, for firms in states with a large homosexual population, and for firms in human capital-intensive industries. Lastly, we provide evidence suggesting that ENDAs affect innovation by matching employees, who are generally more creative than anti-gay employees, with innovative firms.
© 2016 Institute for Operations Research and the Management Sciences (INFORMS). This is the author created version of a work that has been peer reviewed and accepted for publication by Management Science, INFORMS. It incorporates referee’s comments but changes resulting from the publishing process, such as copyediting, structural formatting, may not be reflected in this document. The published version is available at: [http://dx.doi.org/10.1287/mnsc.2016.2457].