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Does Birthplace Diversity Affect Economic Complexity ? Cross-Country Evidence

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  • Dany Bahar

    (The Brookings Institution, Harvard CID, CESifo and IZA)

  • Hillel Rapoport

    (Paris School of Economics, Université Paris 1 Panthéon-Sorbonne and CEPII)

  • Riccardo Turati

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

Abstract

We empirically investigate the relationship between a country's economic complexity and the diversity in the birthplaces of its immigrants. Our cross-country analysis suggests that birthplace diversity is strongly and positively associated with economic complexity. This holds particularly for diversity among highly educated migrants and for countries at intermediate levels of economic complexity. The results are robust to accounting for previous trends in birthplace diversity as well as to using alternatives diversity measures. We address endogeneity concerns by instrumenting diversity through predicted stocks from a pseudo-gravity model as well as from a standard shift-share approach. Finally, we provide evidence suggesting that birthplace diversity boosts economic complexity by increasing the diversification of the host country's export basket.

Suggested Citation

  • Dany Bahar & Hillel Rapoport & Riccardo Turati, 2019. "Does Birthplace Diversity Affect Economic Complexity ? Cross-Country Evidence," LIDAM Discussion Papers IRES 2019020, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  • Handle: RePEc:ctl:louvir:2019020
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    2. Adam Levai & Riccardo Turati, 2021. "The Impact of Immigration on Workers’ Protection," LIDAM Discussion Papers IRES 2021021, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES), revised 07 Sep 2021.
    3. Keneck-Massil, Joseph & Nvuh-Njoya, Youssouf, 2021. "Did colonisation matter for comparative economic complexity?," Economics Letters, Elsevier, vol. 203(C).
    4. Vu, Trung V., 2020. "Does LGBT inclusion promote national innovative capacity?," MPRA Paper 98260, University Library of Munich, Germany.
    5. Nguyen, Canh Phuc & Schinckus, Christophe & Su, Thanh Dinh, 2020. "The drivers of economic complexity: International evidence from financial development and patents," International Economics, Elsevier, vol. 164(C), pages 140-150.

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    More about this item

    Keywords

    economic complexity; birthplace diversity; immigration; growth;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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