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Immigrants and Firms' Productivity: Evidence from France

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Author Info

  • Mitaritonna, Cristina

    ()
    (CEPII, Paris)

  • Orefice, Gianluca

    ()
    (CEPII, Paris)

  • Peri, Giovanni

    ()
    (University of California, Davis)

Abstract

Immigrants may complement native workers, increase productivity, allow specialization by skill in the firm and lower costs. These effects could be beneficial for the firm and increase its productivity and profits. However not all firms use immigrants. Allowing firms to have differential fixed cost in hiring immigrants we analyze the impact of an increase in local supply of immigrants on firms' immigrant employment and firm's productivity. Using micro-level data on French firms, we show that a supply-driven increase in foreign born workers in a department (location) increases the productivity of firms in that department. We also find that this effect is significantly stronger for firms with initially zero level of foreign employment. Those are also the firms whose share of immigrants increases the most. We also find that the positive productivity effect of immigrants is associated with faster growth of capital and improved export performances of the firms. Finally we find a positive effect of immigration on wages of natives and on specialization of natives in complex occupations, that is common to all firms in the department.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 8063.

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Length: 55 pages
Date of creation: Mar 2014
Date of revision:
Handle: RePEc:iza:izadps:dp8063

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Keywords: immigrants; firms; productivity; heterogeneity; fixed costs of hiring;

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  1. Hatzigeorgiou, Andreas & Lodefalk, Magnus, 2011. "Trade and Migration: Firm-Level Evidence (LONG VERSION)," Working Papers, Örebro University, School of Business 2011:6, Örebro University, School of Business.
  2. Andrew B. Bernard & Jonathan Eaton & J. Bradford Jensen & Samuel Kortum, 2000. "Plants and Productivity in International Trade," Boston University - Institute for Economic Development, Boston University, Institute for Economic Development 105, Boston University, Institute for Economic Development.
  3. Giovanni Peri & Chad Sparber, 2008. "Task Specialisation, Immigration and Wages," Development Working Papers 252, Centro Studi Luca d\'Agliano, University of Milano.
  4. Christian Dustmann & Tommaso Frattini & Ian Preston, 2008. "The Effect of Immigration along the Distribution of Wages," CReAM Discussion Paper Series 0803, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  5. G. Steven Olley & Ariel Pakes, 1992. "The Dynamics of Productivity in the Telecommunications Equipment Industry," NBER Working Papers 3977, National Bureau of Economic Research, Inc.
  6. Gianmarco I.P. Ottaviano & Giovanni Peri & Greg. C. Wright, 2010. "Immigration, Offshoring and American Jobs," Development Working Papers 298, Centro Studi Luca d\'Agliano, University of Milano.
  7. Ilke Van Beveren, 2012. "Total Factor Productivity Estimation: A Practical Review," Journal of Economic Surveys, Wiley Blackwell, Wiley Blackwell, vol. 26(1), pages 98-128, 02.
  8. Pedro S. Martins, Matloob Piracha and José Varejão, 2013. "Do Immigrants Displace Native Workers? Evidence from Matched Panel Data," Working Papers 44, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
  9. Trax, Michaela & Brunow, Stephan & Suedekum, Jens, 2012. "Cultural Diversity and Plant‐Level Productivity," IZA Discussion Papers 6845, Institute for the Study of Labor (IZA).
  10. Andrew B. Bernard & J. Bradford Jensen, 1997. "Exceptional Exporter Performance: Cause, Effect, or Both?," NBER Working Papers 6272, National Bureau of Economic Research, Inc.
  11. Nikolaj Malchow-Møller & Jakob R. Munch & Jan Rose Skaksen, 2012. "Do Immigrants Affect Firm-Specific Wages?," Scandinavian Journal of Economics, Wiley Blackwell, Wiley Blackwell, vol. 114(4), pages 1267-1295, December.
  12. Zimmermann, Klaus F, 1993. "Native Wage Impacts of Foreign Labour: A Random Effects Panel Analysis," CEPR Discussion Papers, C.E.P.R. Discussion Papers 851, C.E.P.R. Discussion Papers.
  13. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 70(2), pages 317-341, 04.
  14. Anette Haas & Michael Lucht, 2013. "Heterogeneous Firms and Imperfect Substitution: The Productivity Effect of Migrants," Norface Discussion Paper Series, Norface Research Programme on Migration, Department of Economics, University College London 2013019, Norface Research Programme on Migration, Department of Economics, University College London.
  15. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," NBER Working Papers 9755, National Bureau of Economic Research, Inc.
  16. 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.
  17. Andri Chassamboulli & Theodore Palivos, 2013. "The impact of immigration on the employment and wages of native workers," Working Papers, Bank of Greece 160, Bank of Greece.
  18. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 317-341.
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