The Nexus between Labor Diversity and Firm Innovation

Pierpaolo Parrotta (1, 2) , Dario Pozzoli , Mariola Pytlikova

1 UNIL - Université de Lausanne = University of Lausanne
2 Aarhus University [Aarhus]

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.

Mots clés: extensive and intensive margins; Labor diversity; ethnic diversity; patenting activity

Domaines: Gestion et management

Pierpaolo Parrotta, Dario Pozzoli, Mariola Pytlikova. The Nexus between Labor Diversity and Firm Innovation. Journal of Population Economics, 2014, 27(2), pp.303-364. ⟨10.1007/s00148-013-0491-7⟩. ⟨hal-01513968⟩