Impacts of workplace cultural differences on innovation and economic growth in Europe


  • Kenneth Obinna Agu Doctoral School of Management and Business Administration, Faculty of Economics and Social Sciences, Szent Istvan University



culture, innovation, mobility, economic growth, diversity


Cultural differences and innovativeness are multi-faceted social phenomenon with innumerable manifestations. Majority of studies have indicated the positive impact of culture. There are some research findings which concluded that culture has a negative impact mainly due to language barriers of diverse cultural workforce which led to low level of communication, in turn led to low level of innovation. Hence the impact of culture on innovation and economic development is debated. Innovation takes place as an art of exercises routed into cultural view points and attitudes. With European Union struggling economies and financial crises, social integration and human capital mobility are key solutions to create innovation and innovative solutions. This study is, therefore aimed at examining the impacts of workplace cultural differences (in a form of human capital mobility) on innovation and economic growth in Europe. Accordingly, Germany, France, Belgium, and Luxembourg were purposively selected based on the higher number of diversified workforce available in companies located in these countries, in order words human capital mobility. Hence, data was collected using a questionnaire random sample of 392 employees (98 from each country) were selected. Consequently, though small portion of the respondents mentioned the negative impact of cultural diversity, the majority of the respondents and the results of the in-depth interview implied that cultural diversity brings people together and enables them to be creative and enhance their innovative performance. Mobility of skilled human capital is an attribute of culturally diverse workforce in a certain company which enable them to share knowledge and skills which in turn improve their innovative capacity. Therefore, this study concluded that cultural diversity has a significant positive impact on innovation and hence on the economic growth. But the barriers that may be seen at workplace due to cultural differences should be properly managed and prior training sessions to newly employed personnel and a platform where all the employees can get an opportunity to introduce themselves and ease their communication should be arranged.

Információk a szerzőről

Kenneth Obinna Agu, Doctoral School of Management and Business Administration, Faculty of Economics and Social Sciences, Szent Istvan University

PhD Student


Aggarwal, R., Goodell, J.W., (2009): Markets and institutions in financial intermediation: national characteristics as determinants. Journal of Banking and Finance 33, 1770–1780. DOI:

Agu Kenneth O., Maria Fekete F., (2016): Creativity and Innovation Exploration: The Impact of Cultural Diversity in an Organization: Management Journal of Management 2016, No. 2 (23) ISSN 1648 – 7974 (VAGYDA)

Ahern, K., Daminelli, D., Fracassi, C., (2015): Lost in translation? The effect of cultural values on mergers around the world. J. Financ. Econ. 117, 165–189. DOI:

Alesina, A., & La Ferrara, E. (2005): Ethnic diversity and economic performance. Journal of Economic Literature, 43, 762–800. DOI: 1257/002205105774431243

Anderson, R.C., Reeb, D.M., Upadhyay, A., Zhao, W., (2011): The economics of director heterogeneity. Financ. Manag. 40, 5–38. DOI:

Becker G (1964): Human capital: a theoretical analysis with special reference to education. Columbia University Press, New York and economic growth. Procedia — Social and Behavioral Sciences, 24, 815–828. ISBN: 0-226-04119-0

Batalova, J., Fix, M., (2017): New Brain Gain: Rising Human Capital Among Recent Immigrants to the United States. Migration Policy Institute, Facts Sheet June, Washington DC

Beugelsdijk, S., Frijns, B., (2010): A cultural explanation of the foreign bias in international asset allocation. Journal of Banking and Finance 34, 2121–2131. DOI:

Bjørnskov, C., (2008): Social trust and fractionalization: a possible reinterpretation. Eur. Social. Rev. 24, 271–283. DOI:

Bosetti, V., Cattaneo, C., & Verdolini, E. (2015): Migration of skilled workers and innovation: A European perspective. Journal of International Economics, 96, 311–322. DOI:

Bratti, M., Conti, C., 2018. The effect of immigration on innovation in Italy. Reg. Stud. 52(7), 934–947. DOI:

Bryan, S.H., Nash, R.C., Patel, A., (2015): The effect of cultural distance on contracting decisions: the case of executive compensation. J. Corp. Finance. 33, 180–195. DOI:

Caligiuri, P., Bonache, J., (2016): Evolving and enduring challenges in global mobility. J. World Bus. 51 (1), 127–141. http://DOI:

Card, D., & Lewis, E. (2007): The diffusion of Mexican immigrants during the 1990s: Explanations and impacts. In G. J. Borjas (Ed.), Mexican immigration to the United States (pp. 193–227). Chicago: University of Chicago Press.

Chellaraj, G., Maskus, K., Mattoo, A., (2008): The contribution of skilled immigrations and international graduate students to U.S. Innovation. Rev. Int. Econ. 16 (3), 444–462. DOI:

Čeryová, D. -- Bullová, T. -- Turčeková, N. -- Aamičková, I. -- Moravčíková, D. -- Bielik, P. (2020): Assessment of the Renewable Energy Sector Performance Using Selected Indicators in European Union Countries. In Resources. 9, 102 (2020), s. 2020. ISSN 2079-9276.

Čeryová, D. -- Bullová T. -- Adamičková, I. -- Turčeková, N. -- Bielik, P. (2020): Potential of investments into renewable energy sources. In: Problems and Perspectives in Management. 18, 2 (2020), s. 57--63. ISSN 1727-7051.

Dakhli, M and D de Clercq (2004): Human capital, social capital, and innovation: A multi-country study. Entrepreneurship and Regional Development, 16, 107–128. DOI:

De Arcangelis, G., Di Porto, E., & Santoni, G. (2015): Migration, labour tasks and production structure. Regional Science and Urban Economics, 53, 156–169. DOI: 2015.06.001

Doney, P.M., Cannon, J.P., Mullen, M.R., (1998): Understanding the influence of national culture on the development of trust. Acad. Manag. Rev. 23, 601–620. Econ. J. Macroecon. 2 (2), 31–56. DOI:

El Ghoul, S., Zheng, X., (2016): Trade credit provision and national culture. J. Corp. Financ. 41, 475–501.

For Europe (UN-ECE), United Nations. DOI:

Fernández, R., A. Fogli, and C. Olivetti, (2004): Mothers and Sons: Preference Formation and Female Labour Force Dynamics, Quarterly Journal of Economics, 119(4), 1249-1299.

Fernández Raquel and Alessandra Fogli, (2005): Culture: An Empirical Investigation of Beliefs, Work, and Fertility, NBER WP 11268.

Freeman, C., (1990): The economics of innovation. Elgar Reference Collection, Cheltenham: Edward Elgar.

Gagliardi, L., (2015): Does skilled migration foster innovative performance? Evidence from British local areas. Papers in Regional Science 94 (4), 773–794. DOI:

Giuliano, Paola, (2004): On the Determinants of Living Arrangements in Western Europe: Does Cultural Origin Matter? Working paper.

González-Pernía, JL, I Peña-Legazkue and F Vendrell-Herrero (2012): Innovation, entrepreneurial activity and competitiveness at a sub-national level. Small Business Economics, 39, 561–574. DOI:

Gorodnichenko, Y and G Roland (2011): Individualism, innovation and long-run growth. PNAS, 108 (Supplement 4), 21316–21319. DOI:

Hofstede, G (1980): Culture’s Consequences: International Differences in Work-Related Value. Beverly Hills, CA: Sage Publications. DOI:

Hunt, Jennifer, and Marjolaine Gauthier-Loiselle (2010): "How Much Does Immigration Boost Innovation?" American Economic Journal: Macroeconomics, 2 (2): 31-56. DOI:

Ichino and Maggi, (2000): Work Environment and Individual Background: Explaining Regional Shirking Differentials in a Large Italian Firm, Quarterly Journal of Economics, 115(3): 1057-1090

Jahn, V., & Steinhardt, M. F. (2016): Innovation and immigration – Insights from a placement policy. Economics Letters, 146, 116–119. DOI:

Johnson, G. Kevan S., and Richard W. (2008): Exploring Corporate Strategy. England: Pearson Education Limited. 8th Ed. ISBN-13: 978-0273711919 ISBN-10: 0273711911

Karolyi, A., (2016): The gravity of culture for finance. J. Corp. Financ. 41, 610–625. DOI:

Kemeny, T., (2017): Immigrant diversity and economic performance in cities. Int. Reg. Sci. Rev. 40 (2), 164–208. DOI:

Kerr, S.P., Kerr, W.R., (2016): Immigrants play a disproportionate role in American entrepreneurship. Harv. Bus.

Kerr, S.P., Kerr, W.R., Özden, C., Parsons, C., (2016): Global talent flows. J. Econ. Perspect. 30 (4), 83–106. DOI:

Kerr, W., Lincon, W.F., (2010): The supply side of innovation: H-1B visa reforms and U.S. Ethnic invention. Journal of Labour Economics 28 (3), 473–508. DOI:

Kerr, W.R., (2016): US high-skilled immigration, innovation, and entrepreneurship: empirical approaches and evidence. In: Fink, C., Miguelez, E. (Eds.), The International Mobility of Talent and Innovation: New Evidence and Policy Implications. Cambridge University Press, Cambridge, pp. 193–221.

Lajdová, Z. -- Lajda, J. -- Kapusta, J. – Bielik, P. (2016): Consequences of maize cultivation intended for biogas production. In: Agricultural economics. 62, 12 (2016), s. 543--549.

Lewis, E. (2011): Immigration, skill mix, and capital skill complementarity. Quarterly Journal of Economics, 126, 1029–1069. DOI:

Licht, A.N., Goldschmidt, C., Schwartz, S.H., (2005): Culture, law, and corporate governance. International Review of Law and Economics 25, 229–255. DOI:

Lissoni, F., (2018): International migration and innovation diffusion: an eclectic survey. Reg. Stud. 52 (5), 702–714. DOI:

Masulis, R.W.,Wang, C., Xie, F., (2012): Globalizing the boardroom– the effects of foreign directors on corporate governance and firm performance. J. Account. Econ. 53,527–554. DOI:

Maznevski, M.L., (1994): Understanding our differences: performance in decision-making groups with diverse members. Hum. Relat. 47, 531–552. DOI:

Milliken, F.J., Martins, L.L., (1996): Searching for common threads: understanding the multiple effects of diversity in organizational groups. Acad. Manag. Rev. 21,402–433. DOI:

Nathan, M., (2015): Same difference? Minority ethnic inventors, diversity and innovation in the UK. J. Econ. Geogr. 15, 129–168. DOI:

Nathan, M., Lee, N., (2013): Cultural diversity, innovation, and entrepreneurship: firm level evidence from London. Econ. Geogr. 89 (4), 367–394. DOI:

Nederveen Pieterse, A., van Knippenberg, D., van Diererdonck, D., (2013): Cultural diversity and team performance: the role of team member goal orientation. Acad. Manag. J. 56, 782–804. DOI:

Niebuhr, A., (2010): Migration and innovation. Does Cultural Diversity matter for regional R&D Activity? Papers in Regional Sciences 89 (3), 563–585. DOI:

No, Y., Walsh, J.P., (2010): The importance of foreign-born talent for US innovation. Nat. Biotechnol. 28 (3), 289–291. DOI:

OECD (2007): Innovation and Growth: Rationale for an Innovation Strategy. Paris: OECD Publishing.

OECD (2010): Ministerial Report on the OECD Innovation Strategy. Paris: OECD Publishing.

Østergaard, C.R., Timmermans, B., Kristinsson, K., (2011): Does a different view create something new? The effect of employee diversity on innovation. Res. Policy 40 (3),500–509 04.2011. DOI:

Ottaviano, G.M., Peri, G., (2012): Rethinking the effects of immigration on wages. J. Eur. Econ. Assoc. 10 (1), 152–197. DOI:

Ozgen, C., Nijkamp, P., & Poot, J. (2013): The impact of cultural diversity on firm innovation: Evidence from Dutch micro-data. IZA Journal of Migration, 2, 18. DOI:


Ozgen, C., Nijkamp, P., Poot, J., (2012): Immigration and innovation in European regions. In: Nijkamp, P., Poot, J., Sahin, M. (Eds.), Migration Impact Assessment: New Horizons. Edward Elgar. ISBN -13: 978-0-444-53768-3

Ozgen, C., Nijkamp, P., Poot, J., (2017): The elusive effects of workplace diversity on innovation. Papers in Regional Science 96, S29–S49. DOI: 12176.

Parrotta, P., Pozzoli, D., Pytlikova, M., (2014): The Nexus Between labour diversity and firm’s innovation. J. Popul. Econ. 27 (303). DOI: 0491-7.

Peri, G. (2012): The effect of immigration on productivity: Evidence from U.S. states. Review of Economics and Statistics, 94, 348–358.DOI:


ROSS, A. S., & WESTERFIELD, W. R., (2008): Modern Financial Management. 8th Ed. McGraw-Hill Irwin International Edition. U.S.A. ISBN-10: 0071286527 ISBN-13: 978-0071286527

Rumen, D (2008): Innovation as a Key Driver of Competitiveness, Economic Commission .

Schwartz, S.H., 2012. An overview of the Schwartz theory of basic values. Online Read. Psychol. Cult. 2 (1). DOI:

Schwartz, SH (1992): Universals in the content and structure of values: Theoretical advances and empirical tests in 20 countries. In Advances in Experimental Social Psychology. MP Zanna (ed.), San Diego, CA: Academic Press. DOI:


Şener, S and E Sarıdoğan (2011): The effects of science-technology-innovation on competitiveness. DOI:


Thompson, M (2015): Social capital, innovation and economic growth. Working Paper NIPE WP 3. DOI:


Wei, Y.-C. (2018): Human Capital Mobility: Tie and Fit. DOI:

Williamson, O.E., (2000): The new institutional economics: taking stock, looking ahead. Journal of Economic Literature 38, 595–613. DOI:


Youndt, M.A., Subramaniam, M. & Snell, S.A., (2004): Intellectual Capital Profiles: An Examination of Investment and Return. Journal of Management Studies, 41, 335-361., DOI:

Zemke, R., Raines, C., & Filipczak, B., (2013): Generations at work: managing the clash of boomers, Gen Xers, and Gen Yers in the workplace. 2nd ed. New York: American Management Association.

Zheng, X., El Ghoul, S., Guedhami, O., Kwok, C.C.Y., (2012): National culture and corporate debt maturity. J. Bank. Financ. 36, 468–488. DOI:


Zheng, Y., Ejermo, O., (S2015): How do the foreign-born perform in inventive activity? Evidence from Sweden. J. Popul. Econ. 28 (3), 659–695. DOI: