Journal of Population Economics

, Volume 27, Issue 2, pp 303–364

The nexus between labor diversity and firm’s innovation

  • Pierpaolo Parrotta
  • Dario Pozzoli
  • Mariola Pytlikova
Original Paper

DOI: 10.1007/s00148-013-0491-7

Cite this article as:
Parrotta, P., Pozzoli, D. & Pytlikova, M. J Popul Econ (2014) 27: 303. doi:10.1007/s00148-013-0491-7

Abstract

In this paper, we investigate the nexus between firm labor diversity and innovation by using data on patent applications filed by firms at the European Patent Office and a linked employer–employee database from Denmark. Exploiting the information retrieved from these comprehensive data sets and implementing proper instrumental variable strategies, we estimate the contribution of workers’ diversity in cultural background, education and demographic characteristics to valuable firm’s innovation activity. Specifically, we find evidence supporting the hypothesis that ethnic diversity may facilitate firms’ patenting activity in several ways by (a) increasing the propensity to (apply for a) patent, (b) increasing the overall number of patent applications, and (c) by enlarging the breadth of patenting technological fields, conditional on patenting. Several robustness checks corroborate the main findings.

Keywords

Labor diversityEthnic diversityPatenting activityExtensive and intensive margins

JEL Classifications

J15J16J24J61J82O32

Copyright information

© Springer-Verlag Berlin Heidelberg 2013

Authors and Affiliations

  • Pierpaolo Parrotta
    • 1
    • 2
  • Dario Pozzoli
    • 2
    • 3
    • 4
  • Mariola Pytlikova
    • 3
    • 5
    • 6
  1. 1.University of LausanneLausanneSwitzerland
  2. 2.Aarhus UniversityAarhusDenmark
  3. 3.The Danish Institute for Regional Government Research (KORA)CopenhagenDenmark
  4. 4.IZABonnGermany
  5. 5.Faculty of EconomicsTechnical University of Ostrava (VŠB-TU)Ostrava 1Czech Republic
  6. 6.CReAMLondonUK