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Immigration and Firm Performance: a city-level approach

Author Info

Listed author(s):
  • Teruel Carrizosa , Mercedes

    ()

    (Industry and Territory Research Group. Department of Economics (Rovira i Virgili University))

  • Segarra Blasco , Agustí

    ()

    (Industry and Territory Research Group. Department of Economics (Rovira i Virgili University))

Abstract

This article analyses the effect of immigration flows on the growthand efficiency of manufacturing firms in Spanish cities. While most studies werefocusing on the effect immigrants have on labour markets at an aggregate level,here, we argue that the impact of immigration on firm performance should not onlybe considered in terms of the labour market, but also in terms of how city’s amenitiescan affect the performance of firms. Implementing a panel data methodology,we show that the immigrants’ increasing pressure has a positive effect on labourproductivity and wages and a negative effect on the job evolution of these manufacturingfirms. In addition, both small and new firms are more sensitive to thepressures of immigrant inflow, while foreign market oriented firms report higherproductivity levels and a less marked impact of immigration than their counterparts.We also present a set of instruments to control for endogeneity. It allows us toconfirm the effect of local immigration flows on the performance of manufacturingfirms.

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Article provided by Asociación Española de Ciencia Regional in its journal Investigaciones Regionales.

Volume (Year): (2009)
Issue (Month): 15 ()
Pages: 111-137

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Handle: RePEc:ris:invreg:0091
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Keywords: Firm growth; firm location; regional effects;

Find related papers by JEL classification:

  • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
  • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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