Economic Benefits of Ethnolinguistic Diversity: Implications for ...

Finally, the increases in entrepreneurship are associated with two phenomena. First, diverse societies tend to be more open to change; therefore, they provide more individuals with entrepreneurial potential, as well as a more receptive audience for entrepreneurial actions. Second, diverse societies have a higher percentage of minorities and immigrants, and those groups have a higher propensity to be entrepreneurial.

Since it is the creativity, openness to change, entrepreneurship, and innovation that could be the channels through which ethnolinguistic diversity impacts economic performance, it is sensible to analyze the direct impact of diversity on the innovativeness of countries. It is especially sensible because, until now, none of the studies in the field of the political economy have done this. Therefore, I would like to make a first preliminary assessment of the impact of diversity on the innovativeness of countries with a special focus on the conditioning variables of the right context. I assess whether ethnolinguistic diversity, when accompanied by the right context, can indeed lead to higher creativity, openness to change, entrepreneurship, and innovativeness of countries.

There are three main reasons for which the research is important. First, it is important because it tries to assess whether the ethnolinguistic diversity can actually constitute an economic benefit for countries, rather than be a detriment. Currently, the perception of ethnolinguistic diversity in the field of political economy is rather negative, and ethnolinguistic diversity is mainly perceived as dysfunctional for the economic performance of countries. Therefore, it is crucial to assess to what extent the data supports the alternative view, which perceives diversity in a positive light.

The second reason why the research is important is because it underlines the significance of the right context, and it aims at identifying the conditions which are necessary for ethnolinguistic diversity to bring positive results. The underlying assumption of the study is that the positive relationship between ethnolinguistic diversity and innovativeness is conditioned by the existence of the right context variables. If the right context is not present, ethnolinguistic diversity would actually lead to negative results. Therefore, it is essential to identify what constitutes the right context for ethnolinguistic diversity.