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Cultural Diversity and Plant?Level Productivity

Michaela Trax, Stephan Brunow and Jens Suedekum

No 6845, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Using comprehensive data for German establishments (1999-2008), we estimate plant-level production functions to analyze if “cultural diversity” affects total factor productivity. We distinguish diversity in the establishment's workforce and in the aggregate regional labor force where the plant is located. We find that a larger share of foreign workers – either in the establishment or in the region – does not affect productivity. However, there are strong spillovers associated with the degree of cultural heterogeneity. The aggregate level is, quantitatively, at least as important as the workforce composition inside the establishment. Diversity thus seems to induce externalities beyond the boundaries of a single firm; it improves local business environments.

Keywords: plant-level productivity; cultural diversity; knowledge spillovers (search for similar items in EconPapers)
JEL-codes: J21 J31 R23 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2012-09
New Economics Papers: this item is included in nep-bec, nep-eff, nep-geo and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (78)

Published - published in: Regional Science and Urban Economics, 2015, 53, 85-96 [Final version]

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Related works:
Journal Article: Cultural diversity and plant-level productivity (2015) Downloads
Working Paper: Cultural diversity and plant-level productivity (2013) Downloads
Working Paper: Cultural diversity and plant-level productivity (2012) Downloads
Working Paper: Cultural diversity and plant‐level productivity (2012) Downloads
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