Advanced Search
MyIDEAS: Login to save this paper or follow this series

Ethnic Diversity and Firms' Export Behavior

Contents:

Author Info

  • Parrotta, Pierpaolo

    ()
    (Maastricht University)

  • Pozzoli, Dario

    ()
    (Copenhagen Business School)

  • Sala, Davide

    ()
    (University of Southern Denmark)

Abstract

Selling internationally requires products that resonate with an international customer base and therefore an approach to markets that is in keeping with diverse cultures (i.e., relational capital). As emphasized by international business studies, this relational capital is in turn related to the successful teaming of a diverse workforce, as this process teaches employees to operate in multicultural environments. This knowledge becomes like an intangible asset to which firms can resort, also when engaging in international transactions. We explore this channel empirically, investigating the impact of workforce diversity on firms' exporting performances and find that ethnic diversity further justifies firms' different presence in international markets. Since hiring is not a random practice, and firms ultimately select into ethnically different labor forces, we exploit the EU enlargement of 2004 to instrument for the diversity of the pool of workers locally recruitable. Because migrants tend to settle where the attitude toward them is most favorable, we use the median voter's political ideology at firm's location to measure the hostility at time of settlement. This gives our instrument spatial variation besides time variation.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://ftp.iza.org/dp7923.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7923.

as in new window
Length: 70 pages
Date of creation: Jan 2014
Date of revision:
Handle: RePEc:iza:izadps:dp7923

Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org

Order Information:
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Email:

Related research

Keywords: ethnic diversity; export; EU enlargement; median-voter ideology;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Fernanda Brollo & Tommaso Nannicini & Roberto Perotti & Guido Tabellini, 2010. "The Political Resource Curse," NBER Working Papers 15705, National Bureau of Economic Research, Inc.
  2. Luca De Benedictis & Roberta De Santis & Claudio Vicarelli, 2005. "Hub-and-Spoke or else? Free trade agreements in the 'enlarged' European Union," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 2(2), pages 245-260, December.
  3. Evan Osborne, 2000. "The Deceptively Simple Economics of Workplace Diversity," Journal of Labor Research, Transaction Publishers, Transaction Publishers, vol. 21(3), pages 463-476, July.
  4. Gianmarco I.P. Ottaviano & Giovanni Peri, 2004. "The Economic Value of Cultural Diversity: Evidence from US Cities," CESifo Working Paper Series 1117, CESifo Group Munich.
  5. Hong, Lu & Page, Scott E., 2001. "Problem Solving by Heterogeneous Agents," Journal of Economic Theory, Elsevier, Elsevier, vol. 97(1), pages 123-163, March.
  6. Danielken Molina & Marc-Andreas Muendler, 2013. "Preparing to Export," NBER Working Papers 18962, National Bureau of Economic Research, Inc.
  7. Joshua D. Angrist & J�rn-Steffen Pischke, 2010. "The Credibility Revolution in Empirical Economics: How Better Research Design Is Taking the Con out of Econometrics," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 24(2), pages 3-30, Spring.
  8. Fujita,Masahisa & Thisse,Jacques-François, 2013. "Economics of Agglomeration," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521171960.
  9. Pierpaolo Parrotta & Dario Pozzoli & Mariola Pytlikova, 2014. "The nexus between labor diversity and firm’s innovation," Journal of Population Economics, Springer, Springer, vol. 27(2), pages 303-364, April.
  10. Ansgar Belke & Niklas Potrafke, 2011. "Does Government Ideology Matter in Monetary Policy? A Panel Data Analysis for OECD Countries," Working Paper Series of the Department of Economics, University of Konstanz 2011-48, Department of Economics, University of Konstanz.
  11. Adsera, Alicia & Pytlikova, Mariola, 2012. "The Role of Language in Shaping International Migration," IZA Discussion Papers 6333, Institute for the Study of Labor (IZA).
  12. Edward Miguel & Shanker Satyanath & Ernest Sergenti, 2004. "Economic Shocks and Civil Conflict: An Instrumental Variables Approach," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 112(4), pages 725-753, August.
  13. Baldwin, Richard E., 1995. "The Eastern enlargement of the European Union," European Economic Review, Elsevier, Elsevier, vol. 39(3-4), pages 474-481, April.
  14. Grossman, Gene & Maggi, Giovanni, 1998. "Diversity and Trade," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2005, C.E.P.R. Discussion Papers.
  15. Joshua Angrist & Alan B. Krueger, 2001. "Instrumental Variables and the Search for Identification: From Supply and Demand to Natural Experiments," NBER Working Papers 8456, National Bureau of Economic Research, Inc.
  16. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, Econometric Society, vol. 71(6), pages 1695-1725, November.
  17. Leonardo Iacovone & BeataS. Javorcik, 2010. "Multi-Product Exporters: Product Churning, Uncertainty and Export Discoveries," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 120(544), pages 481-499, 05.
  18. Andrew Atkeson & Ariel Tomás Burstein, 2010. "Innovation, Firm Dynamics, and International Trade," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 118(3), pages 433-484, 06.
  19. Hector Calvo & Gregory Corcos & Emanuel Ornelas & Facundo Albornoz, 2010. "Sequential Exporting," 2010 Meeting Papers, Society for Economic Dynamics 1065, Society for Economic Dynamics.
  20. Parrotta, Pierpaolo & Pozzoli, Dario & Pytlikova, Mariola, 2014. "Labor diversity and firm productivity," European Economic Review, Elsevier, Elsevier, vol. 66(C), pages 144-179.
  21. Krautheim, Sebastian, 2012. "Heterogeneous firms, exporter networks and the effect of distance on international trade," Journal of International Economics, Elsevier, Elsevier, vol. 87(1), pages 27-35.
  22. Manski, Charles F, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 60(3), pages 531-42, July.
  23. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2005. "Cultural Biases in Economic Exchange," 2005 Meeting Papers, Society for Economic Dynamics 234, Society for Economic Dynamics.
  24. Andrew Pickering & James Rockey, 2007. "Ideology and the Growth of Government," Bristol Economics Discussion Papers 07/599, Department of Economics, University of Bristol, UK.
  25. Waisman, Gisela & Larsen, Birthe, 2007. "Do attitudes towards immigrants matter?," Working Papers, Copenhagen Business School, Department of Economics 11-2007, Copenhagen Business School, Department of Economics.
  26. Casella, Alessandra & Rauch, James E., 2002. "Anonymous market and group ties in international trade," Journal of International Economics, Elsevier, Elsevier, vol. 58(1), pages 19-47, October.
  27. Lazear, Edward P, 1999. "Globalisation and the Market for Team-Mates," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 109(454), pages C15-40, March.
  28. Montagna, Catia, 2001. "Efficiency Gaps, Love of Variety and International Trade," Economica, London School of Economics and Political Science, London School of Economics and Political Science, vol. 68(269), pages 27-44, February.
  29. Guido Imbens & Jeffrey Wooldridge, 2008. "Recent developments in the econometrics of program evaluation," CeMMAP working papers, Centre for Microdata Methods and Practice, Institute for Fiscal Studies CWP24/08, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  30. Lang, Kevin, 1986. "A Language Theory of Discrimination," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 101(2), pages 363-82, May.
  31. Berliant, Marcus & Fujita, Masahisa, 2004. "Knowledge Creation as a Square Dance on the Hilbert Cube," IDE Discussion Papers, Institute of Developing Economies, Japan External Trade Organization(JETRO) 14, Institute of Developing Economies, Japan External Trade Organization(JETRO).
  32. Roger Congleton & Feler Bose, 2010. "The rise of the modern welfare state, ideology, institutions and income security: analysis and evidence," Public Choice, Springer, Springer, vol. 144(3), pages 535-555, September.
  33. Sala, Davide & Yalcin, Erdal, 2012. "Export experience of managers and the internationalization of firms," Discussion Papers of Business and Economics 18/2012, Department of Business and Economics, University of Southern Denmark.
  34. Imbens, Guido W & Angrist, Joshua D, 1994. "Identification and Estimation of Local Average Treatment Effects," Econometrica, Econometric Society, Econometric Society, vol. 62(2), pages 467-75, March.
  35. Gianmarco I.P. Ottaviano & Giovanni Peri, 2006. "Rethinking the Effects of Immigration on Wages," NBER Working Papers 12497, National Bureau of Economic Research, Inc.
  36. Tommaso Nannicini & Andrea Stella & Guido Tabellini & Ugo Troiano, 2010. "Social Capital and Political Accountability," Working Papers, Fondazione Eni Enrico Mattei 2010.58, Fondazione Eni Enrico Mattei.
  37. Alberto Bisin & Thierry Verdier, 2010. "The Economics of Cultural Transmission and Socialization," NBER Working Papers 16512, National Bureau of Economic Research, Inc.
  38. David Card, 1996. "Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration," Working Papers, Princeton University, Department of Economics, Industrial Relations Section. 747, Princeton University, Department of Economics, Industrial Relations Section..
  39. Marianna Marino & Pierpaolo Parrotta & Dario Pozzoli, 2012. "Does Labor Diversity Promote Entrepreneurship?," Economics Working Papers, School of Economics and Management, University of Aarhus 2012-04, School of Economics and Management, University of Aarhus.
  40. Sanne Hiller, 2013. "Does immigrant employment matter for export sales? Evidence from Denmark," Review of World Economics (Weltwirtschaftliches Archiv), Springer, Springer, vol. 149(2), pages 369-394, June.
  41. Massimo Bordignon & Guido Tabellini, 2009. "Moderating Political Extremism: Single Round vs Runoff Elections under Plurality Rule," CESifo Working Paper Series 2600, CESifo Group Munich.
  42. Yeaple, Stephen Ross, 2005. "A simple model of firm heterogeneity, international trade, and wages," Journal of International Economics, Elsevier, Elsevier, vol. 65(1), pages 1-20, January.
  43. Timo Baas & Herbert Brücker, 2011. "EU Eastern Enlargement: The Benefits from Integration and Free Labour Movement," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, Ifo Institute for Economic Research at the University of Munich, vol. 9(2), pages 44-51, 07.
  44. Iacovone, Leonardo & Javorcik, Beata, 2012. "Getting Ready: Preparation for Exporting," CEPR Discussion Papers, C.E.P.R. Discussion Papers 8926, C.E.P.R. Discussion Papers.
  45. James E. Rauch & Alessandra Casella, 2003. "Overcoming Informational Barriers to International Resource Allocation: Prices and Ties," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 113(484), pages 21-42, January.
  46. Roberto Alvarez & Ricardo López, 2005. "Exporting and performance: evidence from Chilean plants," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 38(4), pages 1384-1400, November.
  47. Alesina, Alberto & La Ferrara, Eliana, 2005. "Ethnic Diversity and Economic Performance," Scholarly Articles 4553005, Harvard University Department of Economics.
  48. James E. Rauch, 2001. "Business and Social Networks in International Trade," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1177-1203, December.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp7923. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.