Journal of Population Economics

, Volume 27, Issue 2, pp 303–364 | Cite as

The nexus between labor diversity and firm’s innovation

  • Pierpaolo Parrotta
  • Dario Pozzoli
  • Mariola Pytlikova
Original Paper

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 diversity Ethnic diversity Patenting activity Extensive and intensive margins 

JEL Classifications

J15 J16 J24 J61 J82 O32 

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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

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