The dual effect of board gender diversity on R&D investments

We examine how gender diversity on boards of directors affects investment in research and development (R&D), thereby providing the platform for future ambidexterity of the organization. Using quantitative data from 44 countries, that are exemplified by qualitative data, our findings show that gender diverse boards result in more complex organizational outcomes in regard to R&D investment than assumed originally. Our findings show that gender diverse boards encourage ambidexterity. On the one hand, increased gender diversity has a negative direct effect on R&D. However by positively affecting equity based remuneration, these diversified boards actually encourage indirectly higher R&D investments that are better correlated with the organization goals. Gender diversity on boards, therefore, encourages organizational behavior that increases the chances for higher ambidexterity over time by encouraging exploitative behavior as well as explorative behavior.