Establishments’ cultural diversity and innovation: evidence from Germany

Brunow, Stephan; Stockinger, Bastian

doi:10.4337/9781783476817.00018

Cited by 8 publications

(11 citation statements)

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“…A related study of Ozgen, Nijkamp, and Poot (2011a) supports these findings. Brunow and Stockinger (2015) and Brunow and Miersch (2015) provide evidence on positive effects due to the employment of high-skilled migrants when considering innovation at an establishment level. We therefore not only consider the overall diversity but also split it into ''low-'' and ''high-skilled'' cultural diversity.…”

Section: The Empirical Model Data and Descriptive Overviewmentioning

confidence: 96%

The Impact of a Culturally Diverse Workforce on Firms’ Revenues and Productivity

Brunow

Nijkamp²

2016

International Regional Science Review

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There is evidence from the literature that firms enjoy higher productivity levels, when the workforce employed is culturally more diverse. It is an open question whether this gain is utilized to shift the supply curve and set lower prices in order to achieve a higher demand and possibly higher revenues. This knowledge gap is not addressed in the existing literature and forms the departure of our research. We introduce a reduced-form model, inspired by the study of Melitz and Ottaviano on heterogeneous firms, and add labor productivity by using the approach of Ottaviano and Peri on cultural diversity. In our empirical study, we employ German data, while the field of research is conducted for single plants, and industry-specific effects are taken into account. Our analysis shows significant positive effects of the cultural diversity of the high-skilled workforce on the market size of single establishments. We conclude that emerging productivity gains are not just paid as dividend or factor rewards but are also used to set lower prices in order to achieve higher demand.

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Section: The Empirical Model Data and Descriptive Overviewmentioning

confidence: 96%

The Impact of a Culturally Diverse Workforce on Firms’ Revenues and Productivity

Brunow

Nijkamp²

2016

International Regional Science Review

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“…Pooling data from five innovation surveys with linked German employer–employee data, Brunow and Stockinger () find cultural diversity among the high‐skilled employees of firms enhances a range of innovation measures. While these results are very positive, they must be interpreted with some caution.…”

Section: Toward a Synthesis Of Empirical Evidencementioning

confidence: 99%

“…Pooling data from five innovation surveys with linked German employer-employee data, Brunow and Stockinger (2013) find cultural 3 FE or random effects are common assumptions for cross-sectional units in panel data analysis. They allow a researcher to implicitly account for time-invariant unobserved factors that may influence the dependent variable in the panel regression model (e.g., Wooldridge, 2010).…”

Section: Toward a Synthesis Of Empirical Evidencementioning

confidence: 99%

Does Cultural Diversity of Migrant Employees Affect Innovation?

Özgen

Peters

Niebuhr

et al. 2014

International Migration Review

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Increasing international labor migration has important effects on the workforce composition of firms in all migrant-receiving countries. The consequences of these changes for firm performance have attracted growing attention in recent years. In this paper, we focus explicitly on the impact of cultural diversity among migrant employees on the innovativeness of firms. We briefly synthesize empirical evidence from a range of contexts across Europe, North America, and New Zealand. We then utilize two unique and harmonized linked employer-employee datasets to provide comparative microeconometric evidence for Germany and the Netherlands. Our panel datasets contain detailed information on the generation of new products and services, determinants of innovation success, and the composition of employment in establishments of firms over the period 1999 to 2006. We find that innovation in both countries is predominantly deter-1 The empirical research reported in this paper was conducted as part of the 2009-2013 Migrant Diversity and Regional Disparity in Europe (MIDI-REDIE) project, funded by the NORFACE-Migration research program, . Financial support from the German Research Foundation (DFG) is also gratefully acknowledged as part of the projects "Diversity and success of organizations" and "Diversity and individual careers." IMR Volume 48 Number S1 (Fall 2014):S377-S416 S377 mined by establishment size and industry. Moreover, obstacles encountered and organizational changes faced by firms drive innovation too. With respect to the composition of employment, the presence of high-skilled staff is most important. Cultural diversity of employees has a positive partial correlation with product innovation. The size and statistical significance of this effect depends on the econometric model specification and the country considered. We conclude from the literature synthesis and the new comparative evidence that cultural diversity of employees can make a positive, but modest and context dependent, contribution to innovation.

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“…See also closely related work on the multiscalar relationship of diversity to innovation, with more mixed results (Brunow & Stockinger, ; Nathan, ; Østergaard & Timmermans, ).…”

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confidence: 99%

“…Estimates for the latter period are authors' estimates based on the American Community Survey 2009-2013 5-Year Estimates(Ruggles et al, 2010).3 Examples of such studies includeBellini, Ottaviano, Pinelli, and Prarolo (2013) andLee (2015). It is beyond the scope of this paper to catalog this literature exhaustively, but interested readers are directed to the review articles cited in the previous section.4 See also closely related work on the multiscalar relationship of diversity to innovation, with more mixed results(Brunow & Stockinger, 2015;Nathan, 2016;Østergaard & Timmermans, 2015).5 There is important related work on the impacts of high-skill immigrants on productivity, wages, employment, and innovation; seeKerr (2013) andLewis and Peri (2014) for detailed reviews. Again, there is closely related work with innovation as the outcome of interest(Brunow & Stockinger, 2015;Ozgen, Nijkamp, & Poot, 2015;Ozgen, Peters, Niebuhr, Nijkamp, & Poot, 2014;Parrotta, Pozzoli, & Pytlikova, 2014;Solheim & Fitjar, 2016).…”

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confidence: 99%

The economic geography of immigrant diversity: Disparate impacts and new directions

Cooke

Kemeny

2017

Geography Compass

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Increasing immigrant diversity, both in the number of immigrants and the diversity of sending countries, is helping reshape the economic landscape in many countries, most notably in their urban regions. This paper provides a succinct introduction to the existing research on the economic effects, particularly productivity, of immigrant diversity, focusing on a recent wave of empirical work. It identifies outstanding questions in the research, offering several ways to push current lines of inquiry ahead and suggesting areas as yet underexplored. To motivate these new directions for geographers to pursue, it presents empirical results that raise more questions than they answer. In doing so, it sets the stage for future work that can generate a deeper understanding of the role of immigrant diversity in shaping economic welfare in cities.

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Establishments’ cultural diversity and innovation: evidence from Germany

Abstract: ISBN 978 1 78347 680 0 (cased) ISBN 978 1 78347 681 7 (eBook)

Cited by 8 publications

References 0 publications

The Impact of a Culturally Diverse Workforce on Firms’ Revenues and Productivity

The Impact of a Culturally Diverse Workforce on Firms’ Revenues and Productivity

Does Cultural Diversity of Migrant Employees Affect Innovation?

The economic geography of immigrant diversity: Disparate impacts and new directions

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