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Immigration And Firm Expansion

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  • William W. Olney

Abstract

Research generally focuses on how immigration affects native workers, while the impact of immigration on domestic firms is often overlooked. This paper addresses this important omission by examining whether firms respond to immigration by expanding their production activities within a city in order to utilize the abundant supply of low-skilled workers. Using data on immigration and the universe of establishments in U.S. cities, the results indicate that firms respond to immigration at the extensive margin by increasing the number of establishments. Not surprisingly, immigration has a more positive impact on the number of establishments that are small in size and in relatively mobile, low-skill-intensive industries. Additional evidence indicates that immigration has little impact on employment within existing establishments, the intensive margin, or on the number of establishments in service industries which may expand simply due to immigrant consumption.
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Suggested Citation

  • William W. Olney, 2013. "Immigration And Firm Expansion," Journal of Regional Science, Wiley Blackwell, vol. 53(1), pages 142-157, February.
  • Handle: RePEc:bla:jregsc:v:53:y:2013:i:1:p:142-157
    DOI: jors.12004
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    More about this item

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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