The Effects of Coworker Heterogeneity on Firm-Level Output: Assessing the Impacts of Cultural and Language Diversity in the National Hockey League

We use a publicly available data set drawn from the professional sport industry to test for the impacts of coworker heterogeneity on firm performance. We focus particularly on the National Hockey League (NHL). NHL teams are truly global firms - they employ workers (players) from a variety of non-English-speaking countries, all of whom are integrated into a single work group (i.e. team). Players from different countries not only bring different languages and cultures, but also bring different playing styles - styles which must be effectively integrated into a cohesive playing unit. We use a panel data set that spans the seasons 2001-02 to 2007-08, and we control for a wide variety of variables that may affect a team's output. The question we pose is: all else equal, does the specific nationality mix on a team matter? In other words, for a given number of foreign players on a team, is it better to have all foreign players from a single country, or should teams attempt to employ foreign players from a variety of countries? Our results indicate that teams that are made up of mostly homogeneous European players appear to gain an advantage in team performance. Also, it appears that NHL teams perform better when their European players tend to come from the same country, rather than being spread across many European countries. We suggest that firms need to be cognizant of the way in which they diversify since the gains from diversity may be greatest when the foreign component of the workforce has, within itself, a higher degree of homogeneity.