The elusive effects of workplace diversity on innovation

Ceren Özgen · Peter J. Nijkamp · Jacques Poot

44 citations0/0 files storedPapers of the Regional Science Association

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Culture, Economy, and Development Studies Firm Innovation and Growth Economic and Technological Innovation

Abstract

We investigate econometrically whether cultural diversity at the workplace boosts innovation. Our longitudinal linked employer-employee data combines two innovation surveys, with Dutch administrative, tax and regional data. We analyse the determinants of a firm's product and process innovations with respect to the firm's internal resources, employee composition and regional agglomeration externalities. We reconfirm the findings of several other recent studies showing a positive partial correlation between innovation and cultural diversity in pooled cross-sectional data; in some cases even when accounting for reverse causation. However, no statistically significant traces of benefit for innovation from cultural diversity remain after introducing firm fixed effects.

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References

1978On the Pooling of Time Series and Cross Section Data 1999The Causal Effect of Education on Earnings 1969The Economy of Cities 2001Cultural Diversity at Work: The Effects of Diversity Perspectives on Work Group Processes and Outcomes 2007The difference: how the power of diversity creates better groups, firms, schools, and societies 2005Ethnic Diversity and Economic Performance 2009Unraveling the effects of cultural diversity in teams: A meta-analysis of research on multicultural work groups 2009The big sort: why the clustering of like-minded America is tearing us apart

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