| 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. |