Culture and Diversity in Knowledge Creation

Author Name Marcus BERLIANT  (Department of Economics, Washington University) /FUJITA Masahisa  (President, RIETI)
Creation Date/NO. April 2011 11-E-046
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Is the paradise of effortless communication the ideal environment for knowledge creation? Or, can the development of local culture in regions raise knowledge productivity compared to a single region with a unitary culture? In other words, can a real technological increase in the cost of collaboration and the cost of public knowledge flow between regions, resulting in cultural differentiation between regions, increase welfare? In our framework, a culture is a set of ideas held exclusively by residents of a location. In general in our model, the equilibrium path generates separate cultures in different regions. When we compare this to the situation where all workers are resident in one region, R & D workers become too homogeneous and there is only one culture. As a result, equilibrium productivity in the creation of new knowledge is lower relative to the situation when there are multiple cultures and workers are more diverse.

Published: Marcus Berliant and Masahisa Fujita, 2012. "Culture and Diversity in Knowledge Creation," Regional Science and Urban Economic, Vol. 42(4), pp. 648-662