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Cultural Diversity, Institutions, and Urban Economic Performance

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  • Thomas Kemeny

    (Department of Public Policy, University of North Carolina at Chapel Hill, Abernethy Hall, Chapel Hill, NC 27599, USA)

Abstract

Interactions between culturally diverse individuals can spur economic benefits by stimulating new ideas that raise urban residents' productivity. But diversity can also diminish economic well-being by making communication difficult, and by stimulating conflict. This paper investigates whether urban institutions—in particular residents' sense of generalized trust—determine when diversity is an economic asset and when it is a liability. To do so, data on trust, birthplace diversity, wages, and demographics in US metropolitan areas are combined. The evidence suggests that workers are much better able to harness the productivity-enhancing spillovers that arise from cultural diversity when they live in cities endowed with strong informal institutions.

Suggested Citation

  • Thomas Kemeny, 2012. "Cultural Diversity, Institutions, and Urban Economic Performance," Environment and Planning A, , vol. 44(9), pages 2134-2152, September.
    • Handle: RePEc:sae:envira:v:44:y:2012:i:9:p:2134-2152
    DOI: 10.1068/a44385
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    2. Rodríguez-Pose, Andrés & Von Berlepsch, Viola, 2017. "Does population diversity matter for economic development in the very long-term? Historic migration, diversity and county wealt," CEPR Discussion Papers 12347, C.E.P.R. Discussion Papers.
    3. Tom Kemeny & Abigail Cooke, 2017. "Urban Immigrant Diversity and Inclusive Institutions," Economic Geography, Taylor & Francis Journals, vol. 93(3), pages 267-291, May.
    4. İ. Semih Akçomak & Hanna Müller-Zick, 2018. "Trust and inventive activity in Europe: causal, spatial and nonlinear forces," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 60(3), pages 529-568, May.
    5. Christopher J. Ellis & Jon C. Thompson & Jiabin Wu, 2016. "Complementarities, Coordination, and Culture," CESifo Working Paper Series 5949, CESifo.
    6. Christopher J. Boudreaux, 2020. "Ethnic diversity and small business venturing," Small Business Economics, Springer, vol. 54(1), pages 25-41, January.
    7. Neil Lee, 2013. "Cultural Diversity, Cities and Innovation: firm Effects or City Effects?," SERC Discussion Papers 0144, Centre for Economic Performance, LSE.
    8. Thomas Kemeny & Abigail Cooke, 2018. "Spillovers from immigrant diversity in cities," Journal of Economic Geography, Oxford University Press, vol. 18(1), pages 213-245.
    9. Charlie Karlsson & Jonna Rickardsson & Joakim Wincent, 2021. "Diversity, innovation and entrepreneurship: where are we and where should we go in future studies?," Small Business Economics, Springer, vol. 56(2), pages 759-772, February.
    10. Thomas Kemeny, 2013. "Immigrant Diversity and Economic Development in Cities: A Critical Review," SERC Discussion Papers 0149, Centre for Economic Performance, LSE.
    11. Colombelli, Alessandra & D'Ambrosio, Anna & Meliciani, Valentina & Francesco Quatraro,, 2016. "Explaining the industrial variety of newborn firms: The role of cultural and technological diversity," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201610, University of Turin.
    12. Andrés Rodríguez-Pose & Viola Berlepsch, 2019. "Does Population Diversity Matter for Economic Development in the Very Long Term? Historic Migration, Diversity and County Wealth in the US," European Journal of Population, Springer;European Association for Population Studies, vol. 35(5), pages 873-911, December.
    13. Silje Haus-Reve & Abigail Cooke, 2019. "Do regional social capital and trust matter for immigrant diversity and wages?," Papers in Evolutionary Economic Geography (PEEG) 1932, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Nov 2019.
    14. Abdul Shaban & Shahbaz Khan, 2023. "Cultural diversity, human capital, and regional economic growth in India," Regional Science Policy & Practice, Wiley Blackwell, vol. 15(5), pages 973-991, June.
    15. Ozbugday, Fatih Cemil, 2019. "Kültür ve Ekonomik Başarı [Culture and Economic Success]," MPRA Paper 96734, University Library of Munich, Germany.
    16. Cooke, Abigail & Kemeny, Thomas, 2017. "Cities, immigrant diversity, and complex problem solving," Research Policy, Elsevier, vol. 46(6), pages 1175-1185.
    17. Hoang, Trung Xuan & Nguyen, Thang Chien & Nga, Van Thi Le, 2022. "Impact of Internal Migration Diversity on Child Welfare: Evidence from Vietnam," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 63(2), pages 149-168, December.
    18. Ling Wang & Jianqing Ruan, 2023. "The Cost and Benefit of Regional Cultural Diversity on the Income of Rural Workers: Evidence from China," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 165(3), pages 759-786, February.
    19. Dimitris Balampanidis, 2017. "Diversity and entrepreneurship in the city of Athens: Different views and ambiguous perceptions of local entrepreneurs," Argomenti, University of Urbino Carlo Bo, Department of Economics, Society & Politics, vol. 8(8), pages 1-24, September.
    20. Christopher Ellis & Jon C. Thompson & Jiabin Wu, 2020. "Labor market characteristics and cultural choice," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 22(5), pages 1584-1617, September.
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