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Does a different view create something new? The effect of employee diversity on innovation

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  • Østergaard, Christian R.
  • Timmermans, Bram
  • Kristinsson, Kari

Abstract

A growing literature is analysing the relation between diversity in the knowledge base and the performance of firms; nevertheless, studies that investigate the impact of employee diversity on innovation are scarce. Innovation is an interactive process that often involves communication and interaction among employees in a firm and draws on their different qualities from all levels of the organisation. This paper investigates the relation between employee diversity and innovation in terms of gender, age, ethnicity, and education. The analyses draw on data from a recent innovation survey. This data is merged with a linked employer-employee dataset that allow us to identify the employee composition of each firm. We test the hypothesis that employee diversity is associated with better innovative performance. The econometric analysis reveals a positive relation between diversity in education and gender on the likelihood of introducing an innovation. Furthermore, we find a negative effect of age diversity and no significant effect of ethnicity on the firm's likelihood to innovate. In addition, the logistic regression reveals a positive relationship between an open culture towards diversity and innovative performance. We find no support of any curvilinear relation between diversity and innovation.

Suggested Citation

  • Østergaard, Christian R. & Timmermans, Bram & Kristinsson, Kari, 2011. "Does a different view create something new? The effect of employee diversity on innovation," Research Policy, Elsevier, vol. 40(3), pages 500-509, April.
  • Handle: RePEc:eee:respol:v:40:y:2011:i:3:p:500-509
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    References listed on IDEAS

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    1. Breschi, Stefano & Lissoni, Francesco & Malerba, Franco, 2003. "Knowledge-relatedness in firm technological diversification," Research Policy, Elsevier, vol. 32(1), pages 69-87, January.
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    6. Quintana-Garci­a, Cristina & Benavides-Velasco, Carlos A., 2008. "Innovative competence, exploration and exploitation: The influence of technological diversification," Research Policy, Elsevier, vol. 37(3), pages 492-507, April.
    7. Kristina Dahlin & L. Weingart & P. Hinds, 2005. "Team diversity and information use," Post-Print hal-00480406, HAL.
    8. Keld Laursen & Volker Mahnke & Per Vejrup-Hansen, 2005. "Do Differences Make a Difference? The Impact of Human Capital Diversity, Experience and Compensation on Firm Performance in Engineering Consulting," DRUID Working Papers 05-04, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    9. Garcia-Vega, Maria, 2006. "Does technological diversification promote innovation?: An empirical analysis for European firms," Research Policy, Elsevier, vol. 35(2), pages 230-246, March.
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    Cited by:

    1. repec:eee:respol:v:47:y:2018:i:1:p:121-138 is not listed on IDEAS
    2. Lauring, Jakob & Selmer, Jan, 2013. "Diversity attitudes and group knowledge processing in multicultural organizations," European Management Journal, Elsevier, vol. 31(2), pages 124-136.
    3. Elisabeth Mueller, 2014. "Entrepreneurs from low-skilled immigrant groups in knowledge-intensive industries: company characteristics, survival and innovative performance," Small Business Economics, Springer, vol. 42(4), pages 871-889, April.
    4. Bosetti, Valentina & Cattaneo, Cristina & Verdolini, Elena, 2015. "Migration of skilled workers and innovation: A European Perspective," Journal of International Economics, Elsevier, vol. 96(2), pages 311-322.
    5. Max Nathan, 2014. "The wider economic impacts of high-skilled migrants: a survey of the literature for receiving countries," IZA Journal of Migration, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-20, December.
    6. Herstad, Sverre J. & Sandven, Tore & Ebersberger, Bernd, 2015. "Recruitment, knowledge integration and modes of innovation," Research Policy, Elsevier, vol. 44(1), pages 138-153.
    7. Stephan Brunow & Bastian Stockinger, 2013. "Establishments' and Regions' Cultural Diversity as a Source of Innovation: Evidence from Germany," Norface Discussion Paper Series 2013022, Norface Research Programme on Migration, Department of Economics, University College London.
    8. repec:eee:respol:v:47:y:2018:i:1:p:218-231 is not listed on IDEAS
    9. Müller, Bettina & Murmann, Martin, 2016. "The workforce composition of young firms and product innovation: Complementarities in the skills of founders and their early employees," ZEW Discussion Papers 16-074, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    10. repec:eee:respol:v:46:y:2017:i:7:p:1312-1326 is not listed on IDEAS
    11. Lin, Jun-You, 2014. "Effects on diversity of R&D sources and human capital on industrial performance," Technological Forecasting and Social Change, Elsevier, vol. 85(C), pages 168-184.
    12. repec:eee:respol:v:47:y:2018:i:1:p:194-208 is not listed on IDEAS
    13. repec:eee:tefoso:v:123:y:2017:i:c:p:216-228 is not listed on IDEAS

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