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Ethnic Heterogeneity and Knowledge Formation in Europe

  • Bosetti Valentina

    (Fondazione Eni Enrico Mattei, Centro Euro-Mediterraneo per i Cambiamenti Climatici and Department of Economics, Bocconi University)

  • Cattaneo Cristina

    (Fondazione Eni Enrico Mattei and Centro Euro-Mediterraneo per i Cambiamenti Climatici)

  • Verdolini Elena

    (Fondazione Eni Enrico Mattei and Centro Euro-Mediterraneo per i Cambiamenti Climatici)

Is the interaction of diverse cultures a factor hampering or facilitating the creation of new ideas? In the present article we summarize results of a study investigating the role of ethnic heterogeneity of the labour force in the creation of new knowledge. We employ a panel of 20 European countries and we study the impact of the share of foreigners in the skilled labour force on two measures of innovation, namely the number of patents and the number of citations of scientific publications. The empirical findings indicate that greater ethnic diversity in the skilled professions is associated with greater innovation. What underlined hypotheses may drive such result? First, skilled foreigners contribute to enlarge the size of the skilled labour force, which in turn is responsible for larger innovation. Second, foreigners positively affect natives' productivity. The interaction of diverse culture and problem solving approaches may indeed favour the creation of new ideas.

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Article provided by Fondazione Eni Enrico Mattei in its journal Review of Environment, Energy and Economics.

Volume (Year): (2012)
Issue (Month): (November)
Pages:

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Handle: RePEc:fem:femre3:2012.11-01
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