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Cultural Diversity and Economic Performance: Evidence from European Regions

In: Geography, Institutions and Regional Economic Performance

Author

Listed:
  • Elena Bellini

    (FEEM)

  • Gianmarco I. P. Ottaviano

    (London School of Economics and Bocconi University)

  • Dino Pinelli

    (FEEM)

  • Giovanni Prarolo

    (University of Bologna)

Abstract

We investigate the relationship between diversity and productivity in Europe using an original dataset that covers the NUTS three regions of 12 European countries. In so doing, we follow the empirical methodology developed by Ottaviano and Peri (J Econ Geogr 6:9–44, 2006). The main idea is that, as cultural diversity may affect both production and consumption through positive or negative externalities, the estimation of both price and income equations is needed to identify the dominant effect. Based on this methodology, we find that diversity is positively correlated with productivity. IV estimates confirm the results, suggesting that causation runs from the former to the latter.

Suggested Citation

  • Elena Bellini & Gianmarco I. P. Ottaviano & Dino Pinelli & Giovanni Prarolo, 2013. "Cultural Diversity and Economic Performance: Evidence from European Regions," Advances in Spatial Science, in: Riccardo Crescenzi & Marco Percoco (ed.), Geography, Institutions and Regional Economic Performance, edition 127, pages 121-141, Springer.
    • Handle: RePEc:spr:adspcp:978-3-642-33395-8_7
    DOI: 10.1007/978-3-642-33395-8_7
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    JEL classification:

    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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