Has corporate culture of innovation improved or diminished over time? Insights from textual analysis and board composition

Purpose This study examines the evolution of corporate innovation culture, focusing on how board independence and gender diversity impact this trend. It seeks to determine whether innovation culture has strengthened over time and to identify the role of board composition in fostering innovation. Design/methodology/approach Using a text-based metric from Li et al. (2021), this study analyzes over 50,000 firm-year observations. Temporal trend analysis and regression modeling assess shifts in innovation culture, with a focus on the moderating effects of independent and gender-diverse boards. Findings The findings reveal a positive trend in corporate innovation culture, supporting the “innovation surge hypothesis.” Independent directors are shown to enhance long-term strategic thinking, while gender-diverse boards contribute varied perspectives, strengthening the culture of innovation. Originality/value This study employs the machine learning-based approach developed by Li et al. (2021) to measure corporate innovation culture, providing fresh insights into how board diversity and independence sustain innovation. By leveraging this novel method, we contribute to the understanding of corporate governance's role in fostering long-term innovative growth.