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Cultural diversity and plant-level productivity

  • Trax, Michaela
  • Brunow, Stephan
  • Suedekum, Jens

Using comprehensive data for German establishments, we estimate plant-evel production functions to analyze if cultural diversity affects total factor productivity. We distinguish diversity in the establishment's workforce and in the aggregate labor force of the region where the plant is located. We find that a larger share of foreign workers . either in the establishment or in the region . does not affect productivity. However, there are spillovers associated with the degree of fractionalization of the group of foreigners into different nationalities. The aggregate level is, quantitatively, at least as important for productivity as the workforce composition inside the establishment.

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Paper provided by Düsseldorf Institute for Competition Economics (DICE), University of Düsseldorf in its series DICE Discussion Papers with number 119.

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Date of creation: 2013
Handle: RePEc:zbw:dicedp:119
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