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

Author

Listed:
  • Ceren Ozgen

    (Department of Spatial Economics, VU University Amsterdam)

  • Peter Nijkamp

    (Department of Spatial Economics, VU University Amsterdam)

  • Jacques Poot

    (National Institute of Demographic and Economic Analysis, University of Waikato)

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.

Suggested Citation

  • Ceren Ozgen & Peter Nijkamp & Jacques Poot, 2013. "Measuring Cultural Diversity and its Impact on Innovation: Longitudinal Evidence from Dutch firms," Norface Discussion Paper Series 2013003, Norface Research Programme on Migration, Department of Economics, University College London.
    • Handle: RePEc:nor:wpaper:2013003
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    More about this item

    Keywords

    immigration; innovation; cultural diversity; knowledge spillovers; linked administrative and survey data;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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