Does Cultural Diversity Help Innovation in Cities: Evidence from London Firms
AbstractLondon is one of the world's major cities, and one of its most diverse. London's cultural diversity is widely seen as a social asset, but there is little hard evidence on its importance for the city's businesses. Theory and evidence suggest various links between urban cultural diversity and innovation, at individual, firm and urban level. This paper uses a sample of 7,400 firms to investigate, exploiting the natural experiment of A8 accession. The results, which are robust to most endogeneity challenges, suggest there is a small but significant 'diversity bonus' for London firms. Diverse management teams are particularly important for ideas generation, reaching international markets and serving London's cosmopolitan population.
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Bibliographic InfoPaper provided by Spatial Economics Research Centre, LSE in its series SERC Discussion Papers with number 0069.
Date of creation: Feb 2011
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Web page: http://www.spatialeconomics.ac.uk/SERC/publications/default.asp
cities; innovation; entrepreneurship; cultural diversity; migration; London;
Other versions of this item:
- Neil Lee & Max Nathan, 2011. "Does cultural diversity help innovation in cities: evidence from London firms," LSE Research Online Documents on Economics 33579, London School of Economics and Political Science, LSE Library.
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
- L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
- M13 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - New Firms; Startups
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-03-26 (All new papers)
- NEP-CSE-2011-03-26 (Economics of Strategic Management)
- NEP-CUL-2011-03-26 (Cultural Economics)
- NEP-ENT-2011-03-26 (Entrepreneurship)
- NEP-INO-2011-03-26 (Innovation)
- NEP-SOC-2011-03-26 (Social Norms & Social Capital)
- NEP-URE-2011-03-26 (Urban & Real Estate Economics)
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