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The nexus between labor diversity and firm’s innovation
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The nexus between labor diversity and firm’s innovation

Author

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  • Pierpaolo Parrotta
  • Dario Pozzoli
  • Mariola Pytlikova

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. Copyright Springer-Verlag Berlin Heidelberg 2014

Suggested Citation

  • Pierpaolo Parrotta & Dario Pozzoli & Mariola Pytlikova, 2014. "The nexus between labor diversity and firm’s innovation," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(2), pages 303-364, April.
    • Handle: RePEc:spr:jopoec:v:27:y:2014:i:2:p:303-364
    DOI: 10.1007/s00148-013-0491-7
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    More about this item

    Keywords

    Labor diversity; Ethnic diversity; Patenting activity; Extensive and intensive margins; J15; J16; J24; J61; J82; O32;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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