Measuring Cultural Diversity and its Impact on Innovation: Longitudinal Evidence from Dutch Firms

26 Pages Posted: 19 Jan 2013

See all articles by Ceren Ozgen

Ceren Ozgen

University of Birmingham

Peter Nijkamp

VU University of Amsterdam - Department of Spatial Economics; Tinbergen Institute

Jacques Poot

Vrije Universiteit Amsterdam, Department of Spatial Economics; University of Waikato - National Institute of Demographic and Economic Analysis; Motu Economic and Public Policy Research; IZA Institute of Labor Economics

Abstract

To investigate econometrically whether cultural diversity of a firm's employees boosts innovation, we create a unique linked employer‐employee dataset that combines data from two innovation surveys in The Netherlands with administrative and tax data. We calculate three distinct measures of diversity. We find that firms that employ fewer foreign workers are generally more innovative, but that diversity among a firm's foreign workers is positively associated with innovation activity. The positive impact of diversity on product or process innovations is greater among firms in knowledge-intensive sectors and in internationally‐oriented sectors. The impact is robust to accounting for endogeneity of foreign employment.

Keywords: immigration, innovation, cultural diversity, knowledge spillovers, linked administrative and survey data

JEL Classification: D22, F22, O31

Suggested Citation

Ozgen, Ceren and Nijkamp, Peter and Poot, Jacques, Measuring Cultural Diversity and its Impact on Innovation: Longitudinal Evidence from Dutch Firms. IZA Discussion Paper No. 7129, Available at SSRN: https://ssrn.com/abstract=2203279

Ceren Ozgen (Contact Author)

University of Birmingham ( email )

Department of Economics
Birmingham, B15 2TT
United Kingdom

Peter Nijkamp

VU University of Amsterdam - Department of Spatial Economics ( email )

De Boelelaan 1105
1081HV Amsterdam
Netherlands
+31 20 4446091 (Phone)
+31 20 4445611 (Fax)

Tinbergen Institute

Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands

Jacques Poot

Vrije Universiteit Amsterdam, Department of Spatial Economics ( email )

De Boelelaan 1105
1081HV Amsterdam
Netherlands

University of Waikato - National Institute of Demographic and Economic Analysis ( email )

Te Raupapa
Private Bag 3105
Hamilton, 3240
New Zealand

Motu Economic and Public Policy Research

Level 1, 93 Cuba Street
P.O. Box 24390
Wellington, 6142
New Zealand

IZA Institute of Labor Economics

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

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