Human Capital Diversity and Product Innovation: A Micro-Level Analysis

The paper investigates the relationship between human capital diversity measured in terms of occupational diversity and a firm's likelihood to innovate. The empirical analysis is based on a linked employer-employee panel dataset of German firms over the period 1998 to 2007. Despite notable differences between service and manufacturing firms, our results clearly indicate a positive relationship between occupational diversity and the propensity to innovate.