Effects of cultural diversity on individual establishments

International immigration affects the degree of cultural diversity present in a labour force. This paper focuses on the consequences of immigration with respect to the level of cultural diversity by estimating employment functions for individual establishments. The theory behind the empirical analyses is based on a "turned around" New Economic Geography model. The data basis used is a linked employer - employee data set generated by a fusion of the IAB Establishment Panel with the Employment Statistics of Germany, which provides very detailed information about individual workers and establishments. In the empirical analyses it is shown that employment is lower when the degree of diversity is higher, regarding the revenue of an individual establishment as given. From this result it can be derived under the conditions of monopolistic competition (implying elastic product demand) that the establishment is able to occupy a relatively large part of the market. Finally this implies relatively high labour demand.effects of immigration, cultural diversity, employment, productivity, firm level

Effects of cultural diversity on individual establishments

International immigration affects the degree of cultural diversity present in a labour force. This paper focuses on the consequences of immigration with respect to the level of cultural diversity by estimating employment functions for individual establishments. The theory behind the empirical analyses is based on a 'turned around' New Economic Geography model. The data basis used is a linked employer -- employee data set generated by a fusion of the IAB Establishment Panel with the Employment Statistics of Germany, which provides very detailed information about individual workers and establishments. In the empirical analyses it is shown that employment is lower when the degree of diversity is higher, regarding the revenue of an individual establishment as given. From this result it can be derived under the conditions of monopolistic competition (implying elastic product demand) that the establishment is able to occupy a relatively large part of the market. Finally this implies relatively high labour demand.

Regional age structure and economic growth: an econometric study for German regions

This paper analyses the impact of the regional age structure on growth of German regions. Based on a neoclassical growth model an augmented Solow model was derived and estimated in a spatial econometric approach. Besides labor and human capital, public spendings and urbanisation measures are controlled for. Adding the age structure of the employed labor force, which we use as proxy for the age pattern of human capital, improves the regression model significantly. Spatial autocorrelation is controlled for and supports OLS results. To get deeper insights in the effectiveness of the age structure quantile regression techniques are applied to distinguish the effects between various levels of growth rates. The results of the different estimation approaches provide evidence that the age structure matters for growth. --age structure,growth,public spending

The effect of a culturally diverse population on regional income in EU regions

After the crisis years of 2008 and 2009 EU countries followed different employment pathes. Employment and wage levels, for instance, are quite unevenly distributed across Europe. Some of the member states expect labour shortages due to demographic change in the future. If this is the case, wages will rise when the shortages occur. From literature on migration it is well known that regions with relatively higher income levels and a lower risk of unemployment are typical destination countries for immigration. Thus, European regions might be expected to become rather mixed in cultural terms in the future. Despite the filling of the labour market and the redistribution of the resource of labour, the ultimate question raised in the discussion is whether there are additional gains or losses due to immigration. This work therefore focuses on the impact of migrants on regional GDP per capita for European regions. Does the proportion of foreigners in the labour force increase or lower regional income? Does the composition of non-natives with respect to their countries of origin matter? Both questions are addressed in this study while controlling for endogeneity. We provide evidence that immigration raises regional income and a tendency towards (roughly classified) dominant foreign-born groups reduces the costs of interaction and integration. Thus, in general immigration has a positive effect on regional performance and the costs of immigration in destination regions are balanced out. Depending on the labour market status of migrants, the regions of orgin of migrants within the EU face a rise or decline in income as a result of the outflow.

The age pattern of human capital and regional productivity

We explore the impact of the age structure of human capital on average regional productivity by applying a spatial econometric analysis based on an augmented Lucas-type production function. We also apply a new definition of regional human capital focusing on its availability. The estimates provide evidence that there are age specific human capital effects in Germany and that a temporary increase in regional productivity could occur during the demographic transition. Furthermore, it becomes clear that the availability based definition of human capital provides additional insight and so, could enrich future studies on regional human capital. --Regional Productivity,Human Capital,Demographic Change

Age Structure and Regional Income Growth

A spatial econometrics cross-section analysis of the NUTS2 regions of the EU15 is carried out to examine whether the age structure of the regional population or differences in the regional age pattern affect growth of regional per capita income. We apply two parsimonious models of the age structure and both provide evidence that there is such a link and that spatial autocorrelation occurs. The most significant growth effect is generated by the age groups which are about the age of 30. After correcting for country specific effects, the evidence is slightly weaker. --demographics,age structure,regional growth,spatial econometrics

Regional industrial firm growth under monopolistic competition and human capital externalities

This paper analyses regional firm growth on industry level. To address this question the theoretical models of the New Economic Geography literature of Baldwin (1999), Baldwin et al. (2001) and Martin and Ottaviano (1999) are taken and augmented to a multi-sector approach to find an empirical specification. The main difference to existing literature on firm growth is that interregional demand linkages and human capital spillover and agglomeration effects are explicitly taken into account. They are derived by theoretical considerations. The approach is flexible enough to deal with competitive markets and monopolistic competition situations as well. From an empirical point of view a Spatial Durbin Model on industrial level results. Typically within the firm growth literature productivity per worker is a crucial explanatory variable. Our model suggests that average productivity per firm, and especially the market potential of a single firm, is relevant for firm formation. We employ German data (establishment history panel) in a Panel setting

The age pattern of human capital and regional productivity

We explore the impact of the age structure of human capital on average regional productivity by applying a spatial econometric analysis based on an augmented Lucas-type production function. We also apply a new definition of regional human capital focusing on its availability. The estimates provide evidence that there are age specific human capital effects in Germany and that a temporary increase in regional productivity could occur during the demographic transition. Furthermore, it becomes clear that the availability based definition of human capital provides additional insight and so, could enrich future studies on regional human capital

Age Structure and Regional Income Growth

A spatial econometrics cross-section analysis of the NUTS2 regions of the EU15 is carried out to examine whether the age structure of the regional population or differences in the regional age pattern affect growth of regional per capita income. We apply two parsimonious models of the age structure and both provide evidence that there is such a link and that spatial autocorrelation occurs. The most significant growth effect is generated by the age groups which are about the age of 30. After correcting for country specific effects, the evidence is slightly weaker

What types of firms tend to be more innovative: A study on Germany

Innovation is a key driver of technological progress and growth in a knowledge-based economy. There are various motives for individual firms to innovate: improving quality secures market leadership, introducing new products leads the firm into new markets, adopting new technologies could be seen as a catch-up strategy within an industry or an improvement of the firm's own products when the technology adopted is based on ideas from other industries. Firms can perform innovation activities in one or more of these areas or in none of them. We therefore raise the question of what types of firms tend to be more innovative, i.e. which firms innovate in more of these areas. For this purpose we employ firm-level survey data and combine it with administrative data from Germany's social security system. An ordered logit model is estimated using a variety of characteristics which describe the workforce employed and other firm-related variables, the regional environment where the firm is located, as well as industry and region fixed effects