The impact of cultural diversity on firm innovation: evidence from Dutch micro-data

Table 5 IV Estimations when sectors employing predominantly low-skilled foreign workers are excluded

1st stage		Share of foreign born			Share of foreign born			Share of foreign born
		(1), (2), (3)			(4), (5), (6)			(7), (8), (9)
Number of foreign restaurants per 10,000 population in 1996		0.461**			0.464**			0.306**
Number of foreign restaurants per 10,000 population in 1996		(0.200)			(0.200)			(0.156)
Log of ‘allochtoon’ in 1996		0.010***			0.009***			0.003**
		(0.001)			(0.001)			(0.001)
2nd stage	Innovative	Product	Process	Innovative	Product	Process	Innovative	Product	Process
	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)
Diversity index	-	-	-	0.161***	0.157***	0.052	-	-	-
				(0.048)	(0.046)	(0.042)
ln(unique)	-	-	-	-	-	-	0.271**	0.277**	0.192*
							(0.122)	(0.120)	(0.104)
Share of foreign born	−0.864**	−0.801**	−0.459	−1.063***	−0.996**	−0.531	−2.319**	−2.299**	−1.573*
	(0.346)	(0.333)	(0.301)	(0.401)	(0.389)	(0.347)	(1.078)	(1.064)	(0.923)
Share of 2nd generation	−0.098	0.242	−0.0198	−0.153	0.190	−0.034	−0.444**	−0.105	−0.232
	(0.224)	(0.214)	(0.193)	(0.219)	(0.211)	(0.188)	(0.195)	(0.190)	(0.166)
Constant	−0.223**	−0.290***	−0.256***	−0.154**	−0.222***	−0.234***	0.286	0.232	0.109
	(0.090)	(0.081)	(0.078)	(0.096)	(0.087)	(0.082)	(0.264)	(0.257)	(0.227)
Sector FE	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Observations	4001	4001	4001	4001	4001	4001	4001	4001	4001
R-squared	0.283	0.249	0.173	0.276	0.241	0.170	0.213	0.164	0.112
Hansen J statistic	1.158	0.956	0.093	1.498	1.266	0.061	2.426	2.192	0.014
p-value	(0.282)	(0.328)	(0.760)	(0.221)	(0.260)	(0.804)	(0.119)	(0.139)	(0.905)

Notes: These estimations include all other variables in Table 3. The sub-sample excludes three sectors in which immigrants are predominantly unskilled. These are: Low-skilled Business Services, Hotels and Restaurants, and Retail Trade. Robust standard errors in parentheses; ***p < 0.01, **p < 0.05, *p < 0.1.