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Cultural Diversity and Employment Growth: Moderating Effect of the Recent Global Financial Crisis

Author

Listed:
  • Grillitsch, Markus

    () (Department of Human Geography, Lund University)

  • Tavassoli, Sam

    () (RMIT)

Abstract

This paper analyses the effect of cultural diversity on employment growth, considering the recent Global Financial Crisis (GFC) as a moderating factor. In doing so, we developed competing hypotheses based on Blau’s theory of heterogeneity versus an alternative perspective which combines the resource-based view (RBV) with social identity theory (SIT). We empirically test such theories using a unique longitudinal dataset comprising the population of all firms in Sweden between 2003 and 2012. We find support for the latter hypothesis, i.e. the relationship between cultural diversity and employment growth is inverted U-shape, which is even more pronounced during/after the GFC. We discussed the implication of findings for other contexts.

Suggested Citation

  • Grillitsch, Markus & Tavassoli, Sam, 2018. "Cultural Diversity and Employment Growth: Moderating Effect of the Recent Global Financial Crisis," Papers in Innovation Studies 2018/5, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
  • Handle: RePEc:hhs:lucirc:2018_005
    as

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    File URL: http://wp.circle.lu.se/upload/CIRCLE/workingpapers/201805_grillitsch_et_al.pdf
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    References listed on IDEAS

    as
    1. Fara Azmat & Yuka Fujimoto & Ruth Rentschler, 2015. "Exploring cultural inclusion: Perspectives from a community arts organisation," Australian Journal of Management, Australian School of Business, vol. 40(2), pages 375-396, May.
    2. repec:taf:ecinnt:v:25:y:2016:i:7:p:631-650 is not listed on IDEAS
    3. Richard F. J. Haans & Constant Pieters & Zi-Lin He, 2016. "Thinking about U: Theorizing and testing U- and inverted U-shaped relationships in strategy research," Strategic Management Journal, Wiley Blackwell, vol. 37(7), pages 1177-1195, July.
    4. Helen Kang & Mandy Cheng & Sidney J. Gray, 2007. "Corporate Governance and Board Composition: diversity and independence of Australian boards," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(2), pages 194-207, March.
    5. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
    6. Farnese, Maria Luisa & Fida, Roberta & Livi, Stefano, 2016. "Reflexivity and flexibility: Complementary routes to innovation?," Journal of Management & Organization, Cambridge University Press, vol. 22(03), pages 404-419, May.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Cultural diversity; firm performance; Global Financial Crisis (GFC);

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • G01 - Financial Economics - - General - - - Financial Crises
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions

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