Sparking Innovation: The Effect of Inventor Gender Diversity on Recombinant Innovation

This study examines how inventor gender diversity influences firm innovation, particularly recombinant intensity that signifies the firm’s capacity to combine distant knowledge domains into new solutions. Using 23 years of U.S. patent data (1.8 million patents, 4,769 firms) and a novel text-based recombination measure (SPaRK), the study finds that a higher share of female inventors increases firms’ recombinant innovation intensity, patent output, citations, and innovation efficiency. Moreover, inventor gender diversity enhances the innovation productivity of female inventors. Cross-gender collaboration emerges as the key mechanism for these gains, enabling firms to unlock the “diversity bonus,” especially for recombinant intensity. Interestingly, the diversity bonus is not homogenous and depends on how central females are within the firm’s knowledge network. Greater gender diversity also translates into better financial outcomes for firms, indicating that the innovation gains outweigh the costs of diversity. For managers, the study suggests not only hiring and retaining a gender-diverse inventor workforce, but also facilitating cross-gender collaborative environments to activate recombinant intensity and other innovation gains, especially at firms where female inventors are not central. For policymakers, the study provides support for expanding female STEM higher education pipelines to enhance the supply of female inventors and ultimately spark corporate innovation.