The elusive effects of workplace diversity on innovation.

We investigate econometrically whether cultural diversity at the workplace boosts innovation. Our longitudinal linked employer-employee data combines two innovation surveys, with Dutch administrative, tax and regional data. We analyse the determinants of a firm's product and process innovations with respect to the firm's internal resources, employee composition and regional agglomeration externalities. We reconfirm the findings of several other recent studies showing a positive partial correlation between innovation and cultural diversity in pooled cross-sectional data; in some cases even when accounting for reverse causation. However, no statistically significant traces of benefit for innovation from cultural diversity remain after introducing firm fixed effects. [ABSTRACT FROM AUTHOR]