nep-cul New Economics Papers
on Cultural Economics
Issue of 2017‒11‒12
two papers chosen by
Roberto Zanola
Università degli Studi del Piemonte Orientale

  1. Duality in Diversity: Cultural Heterogeneity, Language, and Firm Performance By Corritore, Matthew; Goldberg, Amir; Srivastava, Sameer B.
  2. Beyond "Social Contagion": Associational Diffusion and the Emergence of Cultural Variation By Goldberg, Amir; Stein, Sarah K.

  1. By: Corritore, Matthew (Stanford University); Goldberg, Amir (Stanford University); Srivastava, Sameer B. (University of CA, Berkeley)
    Abstract: This article deepens our understanding of how the culture of an organization can reflect its underlying capacity for execution and creative exploration and thereby foreshadow how it will perform in the future. Existing literature often understands cultural diversity as presenting a trade-off between task coordination and creative problem-solving. In contrast, we conceptually unpack cultural heterogeneity into two distinct forms: compositional and content-based. We propose that the former undermines coordination and therefore portends worsening firm profitability, while the latter facilitates creativity and therefore predicts higher market expectations of future growth. To evaluate these propositions, we use unsupervised learning to identify cultural content in employee reviews of nearly 500 publicly traded firms on the Glassdoor website and then develop novel, time-varying measures of cultural heterogeneity. Using coarsened exact matching to reduce imbalance between firms exhibiting higher and lower levels of compositional and content-based heterogeneity, we find support for our two core propositions.
    Date: 2017–07
  2. By: Goldberg, Amir (Stanford University); Stein, Sarah K. (Stanford University)
    Abstract: Network models of diffusion predominantly think about cultural variation as a product of "social contagion." But culture does not spread like a virus. In this paper, we propose an alternative explanation which we refer to as "associational diffusion." Drawing on two insights from research in cognition--that meaning inheres in cognitive associations between concepts, and that such perceived associations constrain people's actions--we suggest that rather than beliefs or behaviors per-se, the things being transmitted between individuals are perceptions about what beliefs or behaviors are compatible with one another. We demonstrate that the endogenous emergence of cultural differentiation can be entirely attributable to social cognition, and does not necessitate a segregated social network or a preexisting division into groups. Our results are robust to variation in individuals' levels of conformity.
    Date: 2017–05

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