In my own research, I’ve found that more tolerant and gay-friendly metro areas have higher rates of innovation and high-tech industry. Adding to this analysis is a detailed new study by the economists Huasheng Gao and Wei Zhang, published in the journal Management Science, which finds that companies in more gay-friendly states are actually significantly more innovative. Specifically, it indicates that the rate at which companies secure patents is higher in states with laws that prohibit discrimination based on sexual preference of gender identity.
The study provides a close statistical analysis of the patent rates of companies in states with employment non-discrimination acts, or ENDAs, compared to states that do not have such laws. All in all, it covers nearly 60,000 U.S. public corporations between 1976 and 2008. These firms had an average of $2.5 billion in assets and more than 9,000 employees. The study looks at 20 states that had such laws in place, a number that has grown since then.
A big issue in studies like this revolves around what researchers call “spurious” findings—that is, findings that are caused by a variable not studied. For example, many states with ENDAs, such as California and Massachusetts, are also among the most innovative, so maybe companies there are just more innovative per se, and their innovativeness has little or nothing to do with those states being more gay-friendly.