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Cultural diversity and plant-level productivity

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  • Michaela Trax

    ()
    (Mercator School of Management, University of Duisburg-Essen)

  • Stephan Brunow

    ()
    (Institute for Employment Research (IAB))

  • Jens Suedekum

    ()
    (Mercator School of Management, University of Duisburg-Essen)

Abstract

Using comprehensive data for German establishments (1999-2008), we estimate plant-level production functions to analyze if “cultural diversity†affects total factor productivity. We distinguish diversity in the establishment’s workforce and in the aggregate regional labor force where the plant is located. We find that a larger share of foreign workers –either in the establishment or in the region –does not affect productivity. However, there are strong spillovers associated with the degree of cultural heterogeneity. The aggregate level is, quantitatively, at least as important as the workforce composition inside the establishment. Diversity thus seems to induce externalities beyond the boundaries of a single firm; it improves local business environments.

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Bibliographic Info

Paper provided by Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London in its series CReAM Discussion Paper Series with number 1223.

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Date of creation: Sep 2012
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Handle: RePEc:crm:wpaper:1223

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Keywords: Cultural diversity; plant-level productivity; knowledge spillovers.;

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Cited by:
  1. Stephan Brunow & Valentina Nafts, 2013. "What types of firms tend to be more innovative: A study on Germany," Norface Discussion Paper Series, Norface Research Programme on Migration, Department of Economics, University College London 2013021, Norface Research Programme on Migration, Department of Economics, University College London.
  2. Longhi, Simonetta, 2013. "Impact of cultural diversity on wages, evidence from panel data," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 43(5), pages 797-807.
  3. Cristina Mitaritonna & Gianluca Orefice & Giovanni Peri, 2014. "Immigrants and Firms' Productivity: Evidence from France," Working Papers, CEPII research center 2014-09, CEPII research center.
  4. de la Rica, Sara & Glitz, Albrecht & Ortega, Francesc, 2013. "Immigration in Europe: Trends, Policies and Empirical Evidence," IZA Discussion Papers 7778, Institute for the Study of Labor (IZA).
  5. Neil Lee, 2013. "Cultural Diversity, Cities and Innovation: firm Effects or City Effects?," SERC Discussion Papers, Spatial Economics Research Centre, LSE 0144, Spatial Economics Research Centre, LSE.
  6. Alesina, Alberto & Harnoss, Johann & Rapoport, Hillel, 2013. "Birthplace Diversity and Economic Prosperity," IZA Discussion Papers 7568, Institute for the Study of Labor (IZA).
  7. Max Nathan, 2014. "The wider economic impacts of high-skilled migrants: a survey of the literature for receiving countries," IZA Journal of Migration, Springer, Springer, vol. 3(1), pages 1-20, December.
  8. Uwe Blien & Linda Borrs & Jens Südekum & Katja Wolf, 2014. "Local Labour Markets and Cultural Diversity," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, Ifo Institute for Economic Research at the University of Munich, vol. 12(2), pages 27-34, 07.
  9. Dr Max Nathan, 2013. "The Wider Economic Impacts Of High-Skilled Migrants: A Survey Of The Literature," NIESR Discussion Papers, National Institute of Economic and Social Research 11607, National Institute of Economic and Social Research.
  10. Stephan Brunow & Bastian Stockinger, 2013. "Establishments' and Regions' Cultural Diversity as a Source of Innovation: Evidence from Germany," Norface Discussion Paper Series, Norface Research Programme on Migration, Department of Economics, University College London 2013022, Norface Research Programme on Migration, Department of Economics, University College London.
  11. Thomas Kemeny, 2013. "Immigrant Diversity and Economic Development in Cities: A Critical Review," SERC Discussion Papers, Spatial Economics Research Centre, LSE 0149, Spatial Economics Research Centre, LSE.
  12. Ceren Ozgen & Thomas de Graff, 2013. "Sorting out the impact of cultural diversity on innovative firms. An empirical analysis of Dutch micro-data," Norface Discussion Paper Series, Norface Research Programme on Migration, Department of Economics, University College London 2013012, Norface Research Programme on Migration, Department of Economics, University College London.
  13. Ceren Ozgen & Peter Nijkamp & Jacques Poot, 2013. "The impact of cultural diversity on firm innovation: evidence from Dutch micro-data," IZA Journal of Migration, Springer, Springer, vol. 2(1), pages 1-24, December.
  14. Ceren Ozgen, 2011. "The Impact of Cultural Diversity on Innovation: Evidence from Dutch Firm-Level Data," Norface Discussion Paper Series, Norface Research Programme on Migration, Department of Economics, University College London 2011013, Norface Research Programme on Migration, Department of Economics, University College London.
  15. Ozgen, Ceren & Nijkamp, Peter & Poot, Jacques, 2011. "The Impact of Cultural Diversity on Innovation: Evidence from Dutch Firm-Level Data," IZA Discussion Papers 6000, Institute for the Study of Labor (IZA).

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