TY - UNPB
T1 - Does Labor Diversity Affect Firm Productivity?
AU - Parrotta, Pierpaolo
AU - Pozzoli, Dario
AU - Pytlikova, Mariola
PY - 2010
Y1 - 2010
N2 - Using an employer-employee dataset, we analyze how diversity in cultural background, skills and demographic characteristics a?ects total factor productivity (TFP) of ?rms in Denmark. Implementing structural estimation of ?rms' production function, we ?nd evidence that labor diversity in skills/education signi?cantly enhances ?rm performance as measured by ?rm TFP. Conversely, diversity in demographics and ethnicity brings mixed results - both dimensions of workforce diversity have either no or negative e?ects on ?rm TFP. Hence, it seems as if the negative e?ects, coming from communication and integration costs connected to a more demographically and culturally diverse workforce, counteract the positive e?ects of diversity on ?rm TFP, coming from creativity and knowledge spillovers. However, we ?nd that ethnic diversity is valuable for ?rms operating in industries characterized by above-average trade openness, giving support to the hypothesis that an ethnically diverse workforce provides information and access to global markets.
AB - Using an employer-employee dataset, we analyze how diversity in cultural background, skills and demographic characteristics a?ects total factor productivity (TFP) of ?rms in Denmark. Implementing structural estimation of ?rms' production function, we ?nd evidence that labor diversity in skills/education signi?cantly enhances ?rm performance as measured by ?rm TFP. Conversely, diversity in demographics and ethnicity brings mixed results - both dimensions of workforce diversity have either no or negative e?ects on ?rm TFP. Hence, it seems as if the negative e?ects, coming from communication and integration costs connected to a more demographically and culturally diverse workforce, counteract the positive e?ects of diversity on ?rm TFP, coming from creativity and knowledge spillovers. However, we ?nd that ethnic diversity is valuable for ?rms operating in industries characterized by above-average trade openness, giving support to the hypothesis that an ethnically diverse workforce provides information and access to global markets.
KW - Labor diversity
KW - Skill complementarities,
KW - Communication barriers
KW - Total factor productivity
M3 - Working paper
SN - 9788778824608
BT - Does Labor Diversity Affect Firm Productivity?
PB - Aarhus School of Business
CY - Aarhus
ER -