Human capital and innovation: mixing apples and oranges on the board of high-tech firms

Abstract

Purpose The purpose of this paper is to provide insights into the implications of board human capital heterogeneity for company innovation by focusing on the educational and the functional background of directors. Moreover, it examines the moderating effect of the CEO expertise-overlap within the innovation domain on the relationship between board human capital heterogeneity and firm innovation. Design/methodology/approach The hypotheses are tested through a set of ordinary least squares regressions on a unique dataset of 149 Italian high-tech companies observed between 2012 and 2015. Findings Findings show that the educational and the functional background heterogeneity of directors increase both the innovation input and output. However, results highlight that these relationships are negatively moderated by the CEO expertise-overlap within the innovation domain. Practical implications The paper emphasizes the importance of appointing directors with different and specific educational and functional backgrounds to foster the company innovation. Originality/value The paper fills a gap in the literature as it has devoted limited attention to the performance implications of board human capital heterogeneity in the high-tech industry where knowledge and skills are the primary sources of value. Moreover, the paper integrates the research on the CEO-board interface by shedding light on how the CEO expertise within the innovation domain affects the contribution of heterogeneous boards to company innovation.

Assessing the Innovation-finance Nexus for SMEs: Evidence from the Arab Region (MENA)

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The curvilinear relationship between advice-giving and innovative capability: a knowledge exchange and combination explanation of the moderated relations

“…Finally, as Alexiev et al (2010) pointed out, the heterogeneity of demographic and education of the workers in the team may influence innovative capability. Previous research has shown that educational background heterogeneity positively influences innovation input (Sarto et al , 2020). Thus, we introduced the heterogeneity of education, the heterogeneity of age and the heterogeneity of tenure as control variables.…”

A Cognitive Approach to Diversity: Investigating the Impact of Board of Directors’ Educational and Functional Heterogeneity on Innovation Performance

“…Nonetheless, when the goal is to explain organizational outcomes, the cognitive approach seems more pertinent. In advocating that position, it has been suggested that "less-visible variables" would have a greater impact than the characteristics over which no control can be exercised (Torchia et al, 2015), especially for a complex matter like innovation (Sarto et al, 2019). Thus, it becomes interesting to focus on the most common diversity types from a cognitive perspective, that are also presented as "less-visible variables" or under the appellation "deep-visible diversity": functional and educational diversity.…”

“…Furthermore, while some studies have reported a positive impact of BoD's diversity on innovation (e.g., Midavaine et al, 2016, Miller andTriana, 2009), they remain plagued with many limitations, such as the consideration of a very small number of diversity types (Midavaine et al, 2016;Sarto et al, 2019), or the focus on only "visible types of diversity" such as those related to gender and ethnicity (Cady andValentine, 1999, Kang et al, 2007). Thus, consistent with the reflection of some scholars (e.g., Mahadeo et al, 2012, Torchia et al, 2015, we consider that less-visible diversity such as functional and educational diversity could have a greater explanatory power regarding possible organizational outcomes such as innovation performance.…”