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Social tolerance and firm innovation

Author

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  • Doan, Gia Han
  • Lee, Suin
  • Wang, Bin

Abstract

This study examines the relationship between social tolerance and firm innovation. We find that firms located in states with higher levels of social tolerance are more innovative. We also find that firms in areas with higher degrees of social tolerance attain higher diversity scores. In addition, the relationship between social tolerance and firm innovation is stronger for firms located in states with higher levels of social capital and for firms with weaker diversity initiatives. Collectively, our findings support the notion that social tolerance, representing the openness and inclusiveness of a local community, plays a significant role in firm innovation.

Suggested Citation

  • Doan, Gia Han & Lee, Suin & Wang, Bin, 2026. "Social tolerance and firm innovation," The North American Journal of Economics and Finance, Elsevier, vol. 83(C).
    • Handle: RePEc:eee:ecofin:v:83:y:2026:i:c:s1062940826000240
    DOI: 10.1016/j.najef.2026.102602
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    Keywords

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    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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