The Nexus between Labor Diversity and Firm's Innovation

44 Pages Posted: 11 Nov 2012

See all articles by Pierpaolo Parrotta

Pierpaolo Parrotta

Aarhus University - School of Business and Social Sciences

Dario Pozzoli

Aarhus University - School of Business and Social Sciences

Mariola Pytliková

VSB - Technical University of Ostrava - Faculty of Economics; Central European Labour Studies Institute (CELSI); University College London - CReAM - Centre for Research and Analysis of Migration; IZA Institute of Labor Economics; Charles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute)

Abstract

In this paper we investigate the nexus between firm labor diversity and innovation using a linked employer-employee data from Denmark. Specifically, exploiting information retrieved from this comprehensive database and implementing proper instrumental variable strategies, we are able to identify the contribution of workers' diversity in cultural background, education and demographic characteristics to valuable firm's innovation activity. The latter is measured by: (1) the firm's propensity to apply for a patent, (2) the number of patent applications (intensive margin) and (3) the firm's ability to patent in different technological areas (extensive margin). We find that ethnic diversity plays an important role in propelling firm's innovation outcomes.

Keywords: labor diversity, ethnic diversity, patenting activity, extensive and intensive margins

JEL Classification: J15, J16, J24, J61, J82, O32

Suggested Citation

Parrotta, Pierpaolo and Pozzoli, Dario and Pytliková, Mariola and Pytliková, Mariola, The Nexus between Labor Diversity and Firm's Innovation. IZA Discussion Paper No. 6972, Available at SSRN: https://ssrn.com/abstract=2173662 or http://dx.doi.org/10.2139/ssrn.2173662

Pierpaolo Parrotta (Contact Author)

Aarhus University - School of Business and Social Sciences ( email )

Nordre Ringgade 1
Aarhus C, DK-8000
Denmark

Dario Pozzoli

Aarhus University - School of Business and Social Sciences ( email )

Nordre Ringgade 1
Aarhus C, DK-8000
Denmark

Mariola Pytliková

VSB - Technical University of Ostrava - Faculty of Economics ( email )

Sokolska 33
Ostrava 1, 701 21
Czech Republic

Central European Labour Studies Institute (CELSI) ( email )

Zvolenská 29
Bratislava, 82109
Slovakia

University College London - CReAM - Centre for Research and Analysis of Migration ( email )

Drayton House
30 Gordon Street
London, WC1H 0AX
United Kingdom

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Charles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute) ( email )

P.O. Box 882
7 Politickych veznu
Prague 1, 111 21
Czech Republic

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