Happy people work differently. They’re more productive, more creative, and willing to take greater risks. And new research suggests that happiness might influence (1) _____ firms work, too.
Companies located in places with happier people invest more, according to a recent research paper. (2) _____ , firms in happy places spend more on R&D (research and development). That’s because happiness is linked to the kind of longer-term thinking (3) _____ for making investments for the future.
The researchers wanted to know if the (4) _____ and inclination for risk-taking that come with happiness would (5) _____ the way companies invested. So they compared U.S. cities’ average happiness (6) _____ by Gallup polling with the investment activity of publicly traded firms in those areas.
(7) _____ enough, firms’ investment and R&D intensity were correlated with the happiness of the area in which they were (8) _____ . But is it really happiness that’s linked to investment, or could something else about happier cities (9) _____ why firms there spend more on R&D? To find out, the researchers controlled for various (10) _____ that might make firms more likely to invest—like size, industry, and sales—and for indicators that a place was (11) _____ to live in, like growth in wages or population. The link between happiness and investment generally (12) _____ even after accounting for these things.
The correlation between happiness and investment was particularly strong for younger firms, which the authors (13) _____ to “less codified decision making process” and the possible presence of “younger and less (14) _____ managers who are more likely to be influenced by sentiment.” The relationship was (15) _____ stronger in places where happiness was spread more (16) _____. Firms seem to invest more in places where most people are relatively happy, rather than in places with happiness inequality.
(17) _____ this doesn’t prove that happiness causes firms to invest more or to take a longer-term view, the authors believe it at least (18) _____ at that possibility. It’s not hard to imagine that local culture and sentiment would help (19) _____ how executives think about the future. “It surely seems plausible that happy people would be more forward-thinking and creative and (20) _____ R&D more than the average,” said one researcher.
