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Do Firms Respond to Immigration?

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Abstract

Research generally focuses on how immigration a€ects native workers, while the impact of immigration on domestic .rms is often overlooked. This paper addresses this important omission by examining whether .rms respond to immigration by adjusting the location of their production activities. The results indicate that .rms respond to immigration at the extensive margin by increasing the number of establish- ments and at the intensive margin by increasing the size of existing establishments. This is an important .nding because .rm mobility can explain the insigni.cant im- pact of immigration on wages found using regional data but the negative impact found using national level data. Additional evidence indicates that these results are not driven by immigrants simply consuming more goods and services.

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File URL: http://web.williams.edu/Economics/wp/OlneyDoFirmsRespondToImmigration.pdf
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Bibliographic Info

Paper provided by Department of Economics, Williams College in its series Department of Economics Working Papers with number 2010-11.

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Length: 34 pages
Date of creation: Dec 2008
Date of revision: Jan 2011
Handle: RePEc:wil:wileco:2010-11

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Keywords: immigration; firm structure; establishment births & deaths;

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  1. Robert Carroll & Douglas Holtz-Eakin & Mark Rider & Harvey S. Rosen, 2000. "Income Taxes and Entrepreneurs' Use of Labor," NBER Working Papers 6578, National Bureau of Economic Research, Inc.
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Cited by:
  1. Cosimo Beverelli & Gianluca Orefice & Nadia Rocha, 2011. "Offshoring and Migration in a World with Policy Spillovers," Research Papers by the Institute of Economics and Econometrics, Geneva School of Economics and Management, University of Geneva 11105, Institut d'Economie et Econométrie, Université de Genève.
  2. Turner, Nick, 2010. "Why Don’t Taxpayers Maximize their Tax-Based Student Aid? Salience and Inertial in Program Selection," University of California at San Diego, Economics Working Paper Series qt0pb3f440, Department of Economics, UC San Diego.

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