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Cultural diversity at the top: Does it increase innovation and firm performance?

Author

Listed:
  • Nikos Bozionelos

    (Audencia Business School)

  • Thomas Hoyland

    (HUBS - Hull University Business School - University of Hull [United Kingdom])

Abstract

The article focuses on cultural diversity and whether it has economic value. Though it is undisputed that cultural diversity within a country increases entrepreneurial behaviour the question that remains is whether this heightened entrepreneurial activity results in greater economic achievements. The article reports on a study that was carried out within the London area that presented an ideal setting given that London is a "super-diverse" city with intense economic activity. The results showed that ethnic diversity in the team of owners and partners of firms was indeed associated with greater innovativeness. This was in line with the view that diversity brings a variety of perspectives, skills and ways of thinking that in turn are translated into greater novelty in products or services and ways of performing tasks. On the other hand, however, ethnic diversity at the top did not translate into success at bringing innovations to the market, neither to revenue growth. Neither did the idea that diversity would be especially beneficial for innovation in knowledge-intensive industries find support. Finally, the data suggested that immigrants become entrepreneurs by choice rather than due to lack of better alternatives. The findings of the study raise the serious question of why the greater innovativeness that diversity brings does not generally translate into market and economic success, which opens new avenues for future research.

Suggested Citation

  • Nikos Bozionelos & Thomas Hoyland, 2014. "Cultural diversity at the top: Does it increase innovation and firm performance?," Post-Print hal-01060334, HAL.
  • Handle: RePEc:hal:journl:hal-01060334
    DOI: 10.5465/amp.2014.0061
    Note: View the original document on HAL open archive server: https://audencia.hal.science/hal-01060334v1
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    References listed on IDEAS

    as
    1. Max Nathan & Neil Lee, 2013. "Cultural Diversity, Innovation, and Entrepreneurship: Firm-level Evidence from London," Economic Geography, Clark University, vol. 89(4), pages 367-394, October.
    2. Suk Choi & Christopher Williams, 2014. "The impact of innovation intensity, scope, and spillovers on sales growth in Chinese firms," Asia Pacific Journal of Management, Springer, vol. 31(1), pages 25-46, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Diversity; Super-diversity; Global cities; Innovativeness; Market success; Economic success; Discrimination; Financial institutions; Diversité; Super-diversité; Villes globales; Innovation; Réussite économique; Institutions financières;
    All these keywords.

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