IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Cultural Diversity, Cities and Innovation: firm Effects or City Effects?

  • Neil Lee
Registered author(s):

Growing cultural diversity is seen as important for innovation. Research has focused on two potential mechanisms: a firm effect, with diversity at the firm level improving knowledge sourcing or ideas generation, and a city effect, where diverse cities helping firms innovate. This paper uses a dataset of over 2,000 UK SMEs to test between these two. Controlling for firm characteristics, city characteristics and firm and city diversity, there is strong evidence for the firm effect. Firms with a greater share of migrant owners or partners are more likely to introduce new products and processes. This effect has diminishing returns, suggesting that it is a 'diversity' effect rather than simply the benefits of migrant run firms. However, there is no relationship between the share of foreign workers in a local labour market and firm level innovation, nor do migrant-run firms in diverse cities appear particularly innovative. But urban context does matter and firms in London with more migrant owners and partners are more innovative than others.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.spatialeconomics.ac.uk/textonly/SERC/publications/download/sercdp0144.pdf
Download Restriction: no

Paper provided by Spatial Economics Research Centre, LSE in its series SERC Discussion Papers with number 0144.

as
in new window

Length:
Date of creation: Oct 2013
Date of revision:
Handle: RePEc:cep:sercdp:0144
Contact details of provider: Web page: http://www.spatialeconomics.ac.uk/SERC/publications/default.asp

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Alex Coad & Rekha Rao, 2006. "Innovation and Firm Growth in High-Tech Sectors: A Quantile Regression Approach," LEM Papers Series 2006/18, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  2. Professor Bronwyn Hall, 2013. "The importance (or not) of patents to UK firms," NIESR Discussion Papers 11449, National Institute of Economic and Social Research.
  3. Jessie Bakens & Peter Mulder & Peter Nijkamp, 2013. "Economic Impacts Of Cultural Diversity In The Netherlands: Productivity, Utility, And Sorting," Journal of Regional Science, Wiley Blackwell, vol. 53(1), pages 8-36, 02.
  4. Niebuhr, Annekatrin, 2006. "Migration and innovation: Does cultural diversity matter for regional R&D activity?," IAB Discussion Paper 200614, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  5. Richard Florida & Charlotta Mellander & Kevin Stolarick, 2008. "Inside the black box of regional development: human capital, the creative class and tolerance," Journal of Economic Geography, Oxford University Press, vol. 8(5), pages 615-649, September.
  6. Ceren Ozgen & Peter Nijkamp & Jacques Poot, 2011. "Immigration And Innovation In European Regions," Norface Discussion Paper Series 2011008, Norface Research Programme on Migration, Department of Economics, University College London.
  7. Neil Lee & Andrés Rodríguez-Pose, 2013. "Original Innovation, Learnt Innovation and Cities: Evidence from UK SMEs," Urban Studies, Urban Studies Journal Limited, vol. 50(9), pages 1742-1759, July.
  8. Max Nathan, 2013. "Top Team Demographics, Innovation And Business Performance: Findings From English Firms And Cities, 2008-9," ERSA conference papers ersa13p69, European Regional Science Association.
  9. Max Nathan, 2011. "The long term impacts of migration in British cities: diversity, wages, employment and prices," LSE Research Online Documents on Economics 33577, London School of Economics and Political Science, LSE Library.
  10. Chad Sparber, 2010. "Racial Diversity and Macroeconomic Productivity across US States and Cities," Regional Studies, Taylor & Francis Journals, vol. 44(1), pages 71-85.
  11. Neil Lee & Max Nathan, 2013. "Cultural diversity, innovation and entrepreneurship: firm-level evidence from London," LSE Research Online Documents on Economics 52363, London School of Economics and Political Science, LSE Library.
  12. Parrotta, Pierpaolo & Pozzoli, Dario & Pytlikova, Mariola, 2012. "The Nexus between Labor Diversity and Firm's Innovation," IZA Discussion Papers 6972, Institute for the Study of Labor (IZA).
  13. Andreas Stephan, 2011. "Locational conditions and firm performance: introduction to the special issue," The Annals of Regional Science, Springer, vol. 46(3), pages 487-494, June.
  14. Leandro Sepulveda & Stephen Syrett & Fergus Lyon, 2011. "Population superdiversity and new migrant enterprise: The case of London," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 23(7-8), pages 469-497, September.
  15. David Audretsch & Dirk Dohse & Annekatrin Niebuhr, 2010. "Cultural diversity and entrepreneurship: a regional analysis for Germany," The Annals of Regional Science, Springer, vol. 45(1), pages 55-85, August.
  16. Ian R. Gordon & Philip McCann, 2005. "Innovation, agglomeration, and regional development," Journal of Economic Geography, Oxford University Press, vol. 5(5), pages 523-543, October.
  17. repec:dgr:uvatin:20110112 is not listed on IDEAS
  18. Erik Stam & Karl Wennberg, 2009. "The roles of R&D in new firm growth," Small Business Economics, Springer, vol. 33(1), pages 77-89, June.
  19. Trax, Michaela & Brunow, Stephan & Suedekum, Jens, 2012. "Cultural Diversity and Plant‐Level Productivity," IZA Discussion Papers 6845, Institute for the Study of Labor (IZA).
  20. repec:ese:iserwp:2011-19 is not listed on IDEAS
  21. Neil Lee, 2011. "Ethnic Diversity and Employment Growth in English Cities," Urban Studies, Urban Studies Journal Limited, vol. 48(2), pages 407-425, February.
  22. Peter Wood, 2009. "Service Competitiveness and Urban Innovation Policies in the UK: The Implications of the 'London Paradox'," Regional Studies, Taylor & Francis Journals, vol. 43(8), pages 1047-1059.
  23. David C. Maré & Richard Fabling & Steven Stillman, 2014. "Innovation and the local workforce," Papers in Regional Science, Wiley Blackwell, vol. 93(1), pages 183-201, 03.
  24. Stephen Syrett & Leandro Sepulveda, 2011. "Realising the diversity dividend: population diversity and urban economic development," Environment and Planning A, Pion Ltd, London, vol. 43(2), pages 487-504, February.
  25. Thomas Kemeny, 2012. "Cultural diversity, institutions, and urban economic performance," Environment and Planning A, Pion Ltd, London, vol. 44(9), pages 2134-2152, September.
  26. Ozgen, Ceren & Nijkamp, Peter & Poot, Jacques, 2011. "The Impact of Cultural Diversity on Innovation: Evidence from Dutch Firm-Level Data," IZA Discussion Papers 6000, Institute for the Study of Labor (IZA).
  27. Simonen, Jaakko & McCann, Philip, 2008. "Firm innovation: The influence of R&D cooperation and the geography of human capital inputs," Journal of Urban Economics, Elsevier, vol. 64(1), pages 146-154, July.
  28. Luisa Gagliardi, 2011. "Does Skilled Migration Foster Innovative Performance? Evidence from British Local Areas," SERC Discussion Papers 0097, Spatial Economics Research Centre, LSE.
  29. Ceren Ozgen, 2011. "The Impact of Cultural Diversity on Innovation: Evidence from Dutch Firm-Level Data," Norface Discussion Paper Series 2011013, Norface Research Programme on Migration, Department of Economics, University College London.
  30. Simonetta Longhi, 2011. "Impact of Cultural Diversity on Wages and Job Satisfaction in England," Norface Discussion Paper Series 2011010, Norface Research Programme on Migration, Department of Economics, University College London.
  31. Criscuolo, Paola & Nicolaou, Nicos & Salter, Ammon, 2012. "The elixir (or burden) of youth? Exploring differences in innovation between start-ups and established firms," Research Policy, Elsevier, vol. 41(2), pages 319-333.
  32. Ian R. Gordon, 2013. "Ambition, human capital acquisition and the metropolitan escalator," LSE Research Online Documents on Economics 50995, London School of Economics and Political Science, LSE Library.
  33. E. Paul Durrenberger, 2012. "Labour," Chapters, in: A Handbook of Economic Anthropology, Second Edition, chapter 8 Edward Elgar.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:cep:sercdp:0144. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.