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Employee Diversity and Environmental Innovation: The Roles of Gender, Nationality, and Education

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  • Christian Richter Østergaard
  • Jacob Rubæk Holm
  • Torben Schubert

Abstract

This paper investigates the roles of employee diversity for environmental innovations in firms. Utilizing firm‐level survey data on environmental innovations and employer–employee register data, we construct measures of employee diversity across education, nationality, and gender for over 6500 Swedish firms. We argue, grounded in the Lundvall–Johnson conceptualization of knowledge, that the positive role of employee diversity stems from knowledge diversity. We find empirical support for this, demonstrating that national and educational diversity positively influence the likelihood that a firm has introduced environmental innovations. Finally, we find that a negative role from demographic diversity creating fault lines entails that the positive association between diversity and environmental innovation may diminish at higher levels of diversity due to the emergence of negative fault lines.

Suggested Citation

  • Christian Richter Østergaard & Jacob Rubæk Holm & Torben Schubert, 2025. "Employee Diversity and Environmental Innovation: The Roles of Gender, Nationality, and Education," Business Strategy and the Environment, Wiley Blackwell, vol. 34(7), pages 8725-8741, November.
    • Handle: RePEc:bla:bstrat:v:34:y:2025:i:7:p:8725-8741
    DOI: 10.1002/bse.70047
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    References listed on IDEAS

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    1. Ozgen, Ceren & Nijkamp, Peter & Poot, Jacques, 2013. "Measuring Cultural Diversity and its Impact on Innovation: Longitudinal Evidence from Dutch Firms," IZA Discussion Papers 7129, IZA Network @ LISER.
    2. Ceren Ozgen & Peter Nijkamp & Jacques Poot, 2013. "The impact of cultural diversity on firm innovation: evidence from Dutch micro-data," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-24, December.
    3. Enrique Acebo & José‐Ángel Miguel‐Dávila & Mariano Nieto, 2021. "External stakeholder engagement: Complementary and substitutive effects on firms' eco‐innovation," Business Strategy and the Environment, Wiley Blackwell, vol. 30(5), pages 2671-2687, July.
    4. Barbieri, Nicolò & Marzucchi, Alberto & Rizzo, Ugo, 2020. "Knowledge sources and impacts on subsequent inventions: Do green technologies differ from non-green ones?," Research Policy, Elsevier, vol. 49(2).
    5. Bengt-ake Lundvall & Bjorn Johnson, 1994. "The Learning Economy," Industry and Innovation, Taylor & Francis Journals, vol. 1(2), pages 23-42.
    6. Parrilli, M. Davide & Balavac-Orlić, Merima & Radicic, Dragana, 2023. "Environmental innovation across SMEs in Europe," Technovation, Elsevier, vol. 119(C).
    7. Christian Richter Østergaard & Jacob Rubæk Holm, 2023. "Regional static diversification and relatedness between industries," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 32(3), pages 755-773.
    8. Brixy, Udo & Brunow, Stephan & D'Ambrosio, Anna, 2020. "The unlikely encounter: Is ethnic diversity in start-ups associated with innovation?," Research Policy, Elsevier, vol. 49(4).
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