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Measuring Cultural Diversity and its Impact on Innovation: Longitudinal Evidence from Dutch Firms

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Author Info

  • Ozgen, Ceren

    ()
    (VU University Amsterdam)

  • Nijkamp, Peter

    ()
    (VU University Amsterdam)

  • Poot, Jacques

    ()
    (University of Waikato)

Abstract

To investigate econometrically whether cultural diversity of a firm's employees boosts innovation, we create a unique linked employer‐employee dataset that combines data from two innovation surveys in The Netherlands with administrative and tax data. We calculate three distinct measures of diversity. We find that firms that employ fewer foreign workers are generally more innovative, but that diversity among a firm's foreign workers is positively associated with innovation activity. The positive impact of diversity on product or process innovations is greater among firms in knowledge-intensive sectors and in internationally‐oriented sectors. The impact is robust to accounting for endogeneity of foreign employment.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7129.

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Length: 26 pages
Date of creation: Jan 2013
Date of revision:
Handle: RePEc:iza:izadps:dp7129

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Related research

Keywords: immigration; innovation; cultural diversity; knowledge spillovers; linked administrative and survey data;

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References

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  1. Parrotta, Pierpaolo & Pozzoli, Dario & Pytlikova, Mariola, 2010. "The Nexus between Labor Diversity and Firm´s Innovation," Working Papers 10-15, University of Aarhus, Aarhus School of Business, Department of Economics.
  2. 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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Cited by:
  1. Longhi, Simonetta, 2013. "Impact of cultural diversity on wages, evidence from panel data," Regional Science and Urban Economics, Elsevier, vol. 43(5), pages 797-807.

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