Disentangling Knowledge Diversity: The Interactive Effect of Heterogeneity‐Based Knowledge Diversity and Inequality‐Based Knowledge Diversity on Team Innovation

Abstract Whereas knowledge heterogeneity has been extensively studied in relation to innovation, the inequality dimension of knowledge diversity has been largely unexplored. We propose that these two dimensions should be considered in conjunction, given that heterogeneity‐based knowledge diversity – member differences in knowledge domain – can invite the elaboration of diverse information and perspectives that can foster team innovativeness, but inequality‐based knowledge diversity – member differences in recognized knowledge level – can disrupt the positive effect of heterogeneity‐based knowledge diversity by stifling the recognition and integration of these diverse perspectives. Our longitudinal analysis of drug patents supported our prediction that inequality‐based knowledge diversity weakened the positive effect of heterogeneity‐based knowledge diversity on knowledge team innovativeness. These findings suggest a fundamental reset in the study of team knowledge diversity: theory and research need to conceptualize team member knowledge differences as based on both heterogeneity and status inequality, and investigate their joint impact on team performance.