Cultural Diversity and Economic Performance: Evidence from European Regions

  • Elena Bellini
  • Gianmarco I. P. Ottaviano
  • Dino Pinelli
  • Giovanni Prarolo
Chapter
Part of the Advances in Spatial Science book series (ADVSPATIAL)

Abstract

We investigate the relationship between diversity and productivity in Europe using an original dataset that covers the NUTS three regions of 12 European countries. In so doing, we follow the empirical methodology developed by Ottaviano and Peri (J Econ Geogr 6:9–44, 2006). The main idea is that, as cultural diversity may affect both production and consumption through positive or negative externalities, the estimation of both price and income equations is needed to identify the dominant effect. Based on this methodology, we find that diversity is positively correlated with productivity. IV estimates confirm the results, suggesting that causation runs from the former to the latter.

Keywords

Cultural Diversity Productivity European regions 

Notes

Acknowledgement

We thank Andrea Ichino, Francesco D’Amuri and Giovanni Peri as well as seminar participants at FEEM and the University of Bologna for comments. An early version of the paper was presented at the final ENGIME Conference on ‘Multicultural Cities: Diversity, Growth and Sustainable Development’, Rome, November 2004. We thank all the participants for their comments. We thank the European Commission (“SUS. DIV Network of Excellence, Contract No. CIT3-CT-2005–513438”) and the Volkswagen Foundation for financial support.

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Copyright information

© Springer-Verlag Berlin Heidelberg 2013

Authors and Affiliations

  • Elena Bellini
    • 1
  • Gianmarco I. P. Ottaviano
    • 2
  • Dino Pinelli
    • 1
  • Giovanni Prarolo
    • 3
  1. 1.FEEMMilanoItaly
  2. 2.London School of Economics and Bocconi UniversityMilanItaly
  3. 3.University of BolognaBolognaItaly

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