Does cultural diversity of migrant employees affect innovation?

Ceren Ozgen, Cornelius Peters, Annekatrin Niebuhr, Peter Nijkamp, Jacques Poot

Research output: Contribution to journalArticlepeer-review

26 Citations (Scopus)

Abstract

Increasing international labor migration has important effects on the workforce composition of firms in all migrant-receiving countries. The consequences of these changes for firm performance have attracted growing attention in recent years. In this paper, we focus explicitly on the impact of cultural diversity among migrant employees on the innovativeness of firms. We briefly synthesize empirical evidence from a range of contexts across Europe, North America, and New Zealand. We then utilize two unique and harmonized linked employer–employee datasets to provide comparative microeconometric evidence for Germany and the Netherlands. Our panel datasets contain detailed information on the generation of new products and services, determinants of innovation success, and the composition of employment in establishments of firms over the period 1999 to 2006. We find that innovation in both countries is predominantly determined by establishment size and industry. Moreover, obstacles encountered and organizational changes faced by firms drive innovation too. With respect to the composition of employment, the presence of high-skilled staff is most important. Cultural diversity of employees has a positive partial correlation with product innovation. The size and statistical significance of this effect depends on the econometric model specification and the country considered. We conclude from the literature synthesis and the new comparative evidence that cultural diversity of employees can make a positive, but modest and context dependent, contribution to innovation
Original languageEnglish
Article number12138
Pages (from-to)S377-S416
Number of pages40
JournalInternational Migration Review
Volume48
Issue numberSupplement 1
Publication statusPublished - 1 Sep 2014

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