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

Ceren Ozgen (), Peter Nijkamp and Jacques Poot
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Ceren Ozgen: Department of Spatial Economics, VU University Amsterdam

No 2013003, Norface Discussion Paper Series from Norface Research Programme on Migration, Department of Economics, University College London

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 (search for similar items in EconPapers)
JEL-codes: D22 F22 O31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cse, nep-eur, nep-ino, nep-knm, nep-mig and nep-sbm
Date: 2013-01
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