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Many names, many gains? How local diversity in Germany affects innovation

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  • Kremer, Anna

Abstract

Meeting others with different backgrounds brings up new ideas. This paper shows that this not only matters for a background in heterogeneous industries or nationalities, but that regional differences matter too. Regions within a country vary in their traditions and culture. Cultural homogeneity within regions becomes mixed due to internal migration, which, like international migration, increases the diversity of a place. In a novel approach, I look at diversity in German municipalities, measured by different family names, and investigate its effect on the number of generated patents. I use a unique dataset from a 1996 phonebook and casualty lists from WWI. There is a positive association between innovation and diversity when defined by the share of new names, a deconcentration measure, or a Shannon index. Causality is established by using instrumental variables estimations with historical borders. I show that intra-country diversity affects patenting positively and conclude that regional differences matter for economic outcomes.

Suggested Citation

  • Kremer, Anna, 2025. "Many names, many gains? How local diversity in Germany affects innovation," CEPIE Working Papers 02/25, Technische Universität Dresden, Center of Public and International Economics (CEPIE).
    • Handle: RePEc:zbw:tudcep:333401
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    Keywords

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    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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