Educate to Innovate: STEM Directors and Corporate Innovation

Using a sample of 14,245 firm-year observations from 2,579 listed firms in the Chinese capital market, this study investigates whether board directors with an educational background in science, technology, engineering, and mathematics (STEM) are associated with greater corporate innovation. The results suggest that such directors have significant beneficial effects on corporate innovation activities. This study provides novel empirical evidence supporting resource dependence theory and extends the labor economics literature regarding the value of STEM graduates for corporate innovation. The findings have significant implications for policymakers and practitioners, showing that firms with a strategic focus on innovation may find it beneficial to appoint more directors with a background in STEM.