The Nexus Between Labor Diversity and Firm’s Innovation

Pierpaolo Parrotta, Dario Pozzoli, Mariola Pytlikova

Research output: Contribution to journalJournal articleResearchpeer-review


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.
Original languageEnglish
JournalJournal of Population Economics
Issue number2
Pages (from-to)303-364
Publication statusPublished - 2014
Externally publishedYes

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