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Ethnic Diversity and Growth: Revisiting the Evidence

Author

Listed:
  • José G. Montalvo

    (University Pompeu Fabra BarcelonaGSE, and IPEG)

  • Marta Reynal-Querol

    (Univ. Pompeu Fabra, IPEG, and BarcelonaGSE)

Abstract

The relationship between ethnic heterogeneity and economic growth is complex. Empirical research working with cross-country data finds a negative, or statistically insignificant, relationship. However, analysis at the city level finds a positive effect of diversity on wages and productivity. Generally there is a trade-off between the economic benefits of diversity and the costs of heterogeneity. Using cells of fixed size, we find that the relationship between diversity and growth is positive for small geographical areas. In the case of Africa, we argue that the explanation is the increase in trade at the boundaries between ethnic groups due to ethnic specialization.

Suggested Citation

  • José G. Montalvo & Marta Reynal-Querol, 2021. "Ethnic Diversity and Growth: Revisiting the Evidence," The Review of Economics and Statistics, MIT Press, vol. 103(3), pages 521-532, July.
    • Handle: RePEc:tpr:restat:v:103:y:2021:i:3:p:521-532
    DOI: 10.1162/rest_a_00901
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    Citations

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    Cited by:

    1. Michele Baggio & Metin Cosgel, 2023. "Racial Diversity and Team Performance: Evidence from the American Offshore Whaling Industry," Working papers 2023-04, University of Connecticut, Department of Economics, revised Feb 2024.
    2. Focacci, Chiara Natalie & Kovac, Mitja & Spruk, Rok, 2023. "Ethnolinguistic diversity, quality of local public institutions, and firm-level innovation," International Review of Law and Economics, Elsevier, vol. 75(C).
    3. Sania Ashraf & Cristina Bicchieri & Upasak Das & Tanu Gupta & Alex Shpenev, 2024. "Learning from diversity: ``jati" fractionalization, social expectations and improved sanitation practices in India," Discussion Papers 24-01, Indian Statistical Institute, Delhi.
    4. Daron Acemoglu & Asuman Ozdaglar & Sarath Pattathil, 2023. "Learning, Diversity and Adaptation in Changing Environments: The Role of Weak Links," Papers 2305.00474, arXiv.org.
    5. Bharathi, Naveen & Malghan, Deepak & Rahman, Andaleeb, 2023. "Ethnic diversity and economic development with spatial segregation," Economics Letters, Elsevier, vol. 222(C).
    6. Luigi Minale & Rudi Rocha & Bruno Vigna, 2024. "Immigrant Diversity and Long-Run Development," RF Berlin - CReAM Discussion Paper Series 2408, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    7. Aris Ananta & Evi Nurvidya Arifin & Ari Purbowati & Paul J. Carnegie, 2023. "Does diversity matter for development? New evidence of ethnic diversity’s mediation between internal migration and economic growth across Indonesia’s regions," Journal of Population Research, Springer, vol. 40(3), pages 1-21, September.
    8. Cáceres-Delpiano, Julio & De Moragas, Antoni-Italo & Facchini, Gabriel & González, Ignacio, 2021. "Intergroup contact and nation building: Evidence from military service in Spain," Journal of Public Economics, Elsevier, vol. 201(C).
    9. Dieu Ne Dort Talla Fokam & Benjamin Fomba Kamga, 2023. "Ethnic diversity and poverty: the role of institutional quality," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 70(1), pages 27-61, March.
    10. Artiles, Miriam, 2022. "Within-Group Heterogeneity in a Multi-Ethnic Society," MPRA Paper 112782, University Library of Munich, Germany.
    11. Sundar Ponnusamy & Mohammad Abbas Hakeem, 2024. "Ethnic inequality and public health," Health Economics, John Wiley & Sons, Ltd., vol. 33(1), pages 41-58, January.
    12. Sania Ashraf & Cristina Bicchieri & Upasak Das & Tanu Gupta & Alex Shpenev, 2023. "Learning from diversity: jati fractionalization, social expectations and improved sanitation practices in India," Papers 2312.15221, arXiv.org.

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