The increasing national diversity of co-workers has no consensus on its impact on performance. Using a team’s predominant nationality as proxy for national diversity and national identity, there is robust evidence that it affects performance. Detailed worker-level data from a highly globalized industry, association football, shows a non-linear relationship between performance and the predominant nationality of a team’s roster. As the number of members from the predominant nationality increase, performance declines. However, beyond a threshold level, performance rises. It implies that performance benefits from national diversity when the predominant nationality is small and from national identity when it is large.
