  Despite recent evidence linking gender diversity in the firm with firm
innovativeness, we know little about the underlying mechanisms. Building on and
extending the Upper Echelon and entrepreneurship literature, we address two
lingering questions: why and how does gender diversity in firm ownership affect
firm innovativeness? We use survey data collected from 7,848 owner-managers of
SMEs across 29 emerging markets to test our hypotheses. Our findings
demonstrate that firms with higher gender diversity in ownership are more
likely to invest in R&D and rely upon a breadth of external capital, with such
differentials explaining sizeable proportions of the higher likelihood of
overall firm innovativeness, product and process, as well as organizational and
marketing innovations exhibited by their firms. Our findings are robust to
corrections for alternative measurement of focal variables, sensitivity to
outliers and subsamples, and endogenous self-selection concerns.
