Sorting out the impact of cultural diversity on innovative firms. An empirical analysis of Dutch micro-data

Ceren Ozgen and Thomas de Graff ()
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Thomas de Graff: aDepartment of Spatial Economics, VU University Amsterdam
Authors registered in the RePEc Author Service: Thomas de Graaff ()

No 2013012, Norface Discussion Paper Series from Norface Research Programme on Migration, Department of Economics, University College London

Abstract: An increasing amount of research in the migration literature shows a positive association between migrant diversity and rm productivity. However, the potential bias due to unobserved heterogeneity remains a challenge. In this paper we analyse the impact of cultural diversity on firm innovativeness, while using finite mixture modeling to control for observed and unobserved heterogeneity. Recent availability of microdata has enabled us to construct a linked employee- employer dataset through merging datasets on both workers and firms. We explore the possible ways of firm-level knowledge exchange among the employees with di fferent cultural backgrounds and its impact on fi rms' product and process innovations. We fi nd that workforce diversity is benefi cial for innovativeness in capital-intensive sectors. It also positively impacts large firms that operate in high-level services, manufacturing, mining and R&D sectors, that are predominantly located in the non-urban areas in the Netherlands. In labour and land intensive sectors, the impact of cultural diversity on innovativeness is inconclusive.

Keywords: Cultural diversity; innovativeness; (un-)observed heterogeneity; finite mixture modeling; migration (search for similar items in EconPapers)
JEL-codes: J15 J21 O31 (search for similar items in EconPapers)
Date: 2013-04
New Economics Papers: this item is included in nep-eff, nep-eur, nep-ino, nep-knm, nep-mig, nep-sbm and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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