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Innovation in diversified cities: Evidence from Canada’s urban areas

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  • Manassé Drabo
  • Horatio M. Morgan

Abstract

This paper examines the impact of cultural and industrial diversity on innovation across 152 Canadian urban areas from 2001 to 2021. By applying a knowledge spillover lens, it associates such diversity with enhanced knowledge variety and diffusion. Using inventor counts and Shannon indices as proxies for innovation and diversity, the authors show that cultural and industrial diversity fosters innovation. An increase of one standard deviation in cultural diversity raises innovation by 13.4% to 81.7%, while the same increase in industrial diversity raises it by 6.6% to 36.6%. Their interaction synergistically yields an additional 2.2% to 12.4% increase in innovation. Meanwhile, recent immigration diversity amplifies these effects, validating the knowledge mechanisms and highlighting significant theoretical and policy implications.

Suggested Citation

  • Manassé Drabo & Horatio M. Morgan, 2025. "Innovation in diversified cities: Evidence from Canada’s urban areas," Economic and Social Reports 20250110003e, Statistics Canada, Analytical Studies and Modelling Branch.
    • Handle: RePEc:stc:stcp8e:20250110003e
    DOI: https://doi.org/10.25318/36280001202501100003-eng
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    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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