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Does cultural diversity help innovation in cities: evidence from London firms

Lee, Neil and Nathan, Max (2011) Does cultural diversity help innovation in cities: evidence from London firms. SERC Discussion Papers, SERCDP0069. Spatial Economics Research Centre (SERC), London School of Economics and Political Sciences, London, UK.

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Abstract

London is one of the world’s major cities, and one of its most diverse. London’s cultural diversity is widely seen as a social asset, but there is little hard evidence on its importance for the city’s businesses. Theory and evidence suggest various links between urban cultural diversity and innovation, at individual, firm and urban level. This paper uses a sample of 7,400 firms to investigate, exploiting the natural experiment of A8 accession. The results, which are robust to most endogeneity challenges, suggest there is a small but significant ‘diversity bonus’ for London firms. Diverse management teams are particularly important for ideas generation, reaching international markets and serving London’s cosmopolitan population.

Item Type: Monograph (Working Paper)
Official URL: http://www.spatialeconomics.ac.uk/SERC/publication...
Additional Information: © 2011 The Author(s)
Library of Congress subject classification: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HT Communities. Classes. Races
Journal of Economic Literature Classification System: J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J61 - Geographic Labor Mobility; Immigrant Workers
L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L21 - Business Objectives of the Firm
M - Business Administration and Business Economics; Marketing; Accounting > M1 - Business Administration > M13 - Entrepreneurship
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O31 - Innovation and Invention: Processes and Incentives
R - Urban, Rural, and Regional Economics > R2 - Household Analysis > R23 - Regional Migration; Regional Labor Markets; Population
Sets: Departments > Geography and Environment
Research centres and groups > Spatial Economics Research Centre
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: SERCDP0069
Date Deposited: 28 Mar 2011 10:36
URL: http://eprints.lse.ac.uk/33579/

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