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LGBTQ-Friendly Employee Policies and Corporate Innovation

Veda Fatmy,Jukka Sihvonen,Sami Vähämaa

Published 2025 in Social Science Research Network

ABSTRACT

Abstract This paper contributes to the literature by examining whether LGBTQ-friendly employee policies foster corporate innovation. Using data on U.S. firms from 2003 to 2017, we document that LGBTQ friendliness has a positive influence on innovation intensity and quality. Specifically, our results demonstrate that LGBTQ-friendly firms produce more patents, have more patent citations, and are associated with higher innovation quality as measured by patent originality, generality, and internationality. Furthermore, our empirical findings indicate that LGBTQ friendliness is positively associated with the firm-level concentration of innovative talent. Overall, our results are consistent with the view that diversity considerations and inclusive corporate policies may lead to competitive advantages for the firm.

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