Establishments cultural diversity and innovation

Abstract

"We investigate the relationship between cultural diversity and innovation in German business establishments. Earlier empirical studies, as well as theoretical approaches from the organisation science literature have identified innovation as a promising realm of diversity advantages. The diversity-innovation link in Germany hitherto has only been studied from a regional perspective by Niebuhr (2010).<br> Our empirical results suggest that human capital and establishments' resources are the most important determinants of innovation. Our hypothesis that cultural diversity fosters innovation can only be confirmed partially, and the interpretation depends on the precise definition of cultural diversity as a multi-dimensional concept. We only find that establishments get more innovative as their high-skilled migrant workforce gets more culturally diverse, supposedly because migrants complement each other's skills and increase the establishment's absorptive capacity. Contrarily, all kinds of innovation relate significantly negatively to migrant shares, even among the high-skilled. These results imply that a diverse mix of skilled migrants can generate productive ideas, but the mere presence of many migrants may be associated with a negative 'Babel' (cultural polarization) effect. This trade-off between the scope (migrant share) and scale of migrant diversity complicates the interpretation, since, normally, high migrant shares and migrant diversity coincide." (Author's abstract, IAB-Doku) ((en))

Cite article

Brunow, S. & Stockinger, B. (2015): Establishments cultural diversity and innovation. Evidence from Germany. In: P. Nijkamp, J. Poot & J. Bakens (Hrsg.) (2015): The economics of cultural diversity, p. 235-269.