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Measuring Cultural Diversity and its Impact on Innovation: Longitudinal Evidence from Dutch firms

Author

Listed:
  • Ceren Ozgen

    () (Department of Spatial Economics, VU University Amsterdam)

  • Peter Nijkamp

    () (Department of Spatial Economics, VU University Amsterdam)

  • Jacques Poot

    () (National Institute of Demographic and Economic Analysis, University of Waikato)

Abstract

To investigate econometrically whether cultural diversity of a firm’s employees boosts innovation, we create a unique linked employer-employee dataset that combines data from two innovation surveys in The Netherlands with administrative and tax data. We calculate three distinct measures of diversity. We find that firms that employ fewer foreign workers are generally more innovative, but that diversity among a firm’s foreign workers is positively associated with innovation activity. The positive impact of diversity on product or process innovations is greater among firms in knowledge-intensive sectors and in internationally-oriented sectors. The impact is robust to accounting for endogeneity of foreign employment.

Suggested Citation

  • Ceren Ozgen & Peter Nijkamp & Jacques Poot, 2013. "Measuring Cultural Diversity and its Impact on Innovation: Longitudinal Evidence from Dutch firms," Norface Discussion Paper Series 2013003, Norface Research Programme on Migration, Department of Economics, University College London.
  • Handle: RePEc:nor:wpaper:2013003
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    References listed on IDEAS

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    Cited by:

    1. Alberto Alesina & Johann Harnoss & Hillel Rapoport, 2016. "Birthplace diversity and economic prosperity," Journal of Economic Growth, Springer, vol. 21(2), pages 101-138, June.
    2. Keith McLeod & Richard Fabling & David C. Maré, 2014. "Hiring New Ideas: International Migration and Firm Innovation in New Zealand," Working Papers 14_14, Motu Economic and Public Policy Research.
    3. Tubadji, Annie & Nijkamp, Peter, 2016. "Impact of Intangible Cultural Capital on Regional Economic Development: A Study on Culture-Based Development in Greece," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 46(1).
    4. Yannu Zheng & Olof Ejermo, 2015. "How do the foreign-born perform in inventive activity? Evidence from Sweden," Journal of Population Economics, Springer;European Society for Population Economics, vol. 28(3), pages 659-695, July.
    5. Longhi, Simonetta, 2013. "Impact of cultural diversity on wages, evidence from panel data," Regional Science and Urban Economics, Elsevier, vol. 43(5), pages 797-807.
    6. Dirk Dohse & Robert Gold, 2014. "Cultural Diversity and Economic Policy," WWWforEurope Working Papers series 64, WWWforEurope.
    7. Thomas Kemeny & Abigail Cooke, 2018. "Spillovers from immigrant diversity in cities," Journal of Economic Geography, Oxford University Press, vol. 18(1), pages 213-245.
    8. Peter Nijkamp & Jacques Poot, 2015. "Cultural Diversity - A Matter of Measurement," CReAM Discussion Paper Series 1502, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    9. Dau, Luis Alfonso, 2016. "Biculturalism, Team Performance, and Cultural-faultline Bridges," Journal of International Management, Elsevier, vol. 22(1), pages 48-62.
    10. Fassio, Claudio & Kalantaryan, Sona & Venturini, Alessandra, 2015. "Human Resources and Innovation: Total Factor Productivity and Foreign Human Capital," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201536, University of Turin.
    11. Francesco LISSONI, 2016. "Migration and Innovation Diffusion : An Eclectic Survey," Cahiers du GREThA 2016-11, Groupe de Recherche en Economie Théorique et Appliquée.
    12. Julie Fry, 2014. "Migration and Macroeconomic Performance in New Zealand: Theory and Evidence," Treasury Working Paper Series 14/10, New Zealand Treasury.
    13. Fumihiko Isada & Yuriko Isada, 2015. "Trans-nationalisation of a main office in a multinational firm," International Journal of Business and Management, International Institute of Social and Economic Sciences, vol. 3(4), pages 15-40, November.
    14. Fassio, Claudio & Kalantaryan, Sona & Venturini, Alessandra, 2015. "Human Resources and Innovation: Total Factor Productivity and Foreign Human Capital," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201536, University of Turin.

    More about this item

    Keywords

    immigration; innovation; cultural diversity; knowledge spillovers; linked administrative and survey data;

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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