More ethical, more innovative? The effects of ethical culture and ethical leadership on realized innovation.

Are ethical public organisations more likely to realize innovation? The public administration literature is ambiguous about this relationship, with evidence being largely anecdotal and focused mainly on the ethical implications of business‐like behaviour and positive deviance, rather than how ethical behaviour and culture may contribute to innovation. In this paper we examine the effects of ethical culture and ethical leadership on reported realized innovation, using 2017 survey data from the Australia Public Service Commission (n = 80,316). Our findings show that both ethical culture at the working group‐level and agency‐level as well as ethical leadership have significant positive associations with realized innovation in working groups. The findings are robust across agency, work location, job level, tenure, education, and gender and across different samples. We conclude our paper with theoretical and practical implications of our research findings. This article examines the effects of ethical culture and ethical leadership on innovation in the Australian Public Service (APS). We find that both ethical culture at the working group level and agency level as well as ethical leadership have significant and positive associations with public sector innovation in working groups. [ABSTRACT FROM AUTHOR]