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Ethnic Diversity and Firms' Export Behavior

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  • Pierpaolo Parrotta

    (ICN Business School, Maastricht University [Maastricht], IZA - Forschungsinstitut zur Zukunft der Arbeit - Institute of Labor Economics, Aarhus University [Aarhus])

  • Dario Pozzoli

    (CBS - Copenhagen Business School [Copenhagen], IZA - Forschungsinstitut zur Zukunft der Arbeit - Institute of Labor Economics, Aarhus University [Aarhus])

  • Davide Sala

    (Universität Passau [Passau], Aarhus University [Aarhus])

Abstract

Media are reporting of companies that are increasing the diversity of their workforce to expand their business internationally. This paper investigates whether these examples constitute pieces of evidence that diversity promotes firms' internationalization. Indeed, diverse companies are like a cosmopolitan world in small scale, in which their employees learn to relate to other cultures. This improves firms' relational capital and ability to market products internationally. To address endogeneity issues, we rely on several empirical strategies, one of which is centered on the well established "shift share" method. Our results are robust across all empirical models, confirming the hypothesis that ethnic diversity favors firms' engagement on international markets.

Suggested Citation

  • Pierpaolo Parrotta & Dario Pozzoli & Davide Sala, 2016. "Ethnic Diversity and Firms' Export Behavior," Post-Print hal-01512787, HAL.
  • Handle: RePEc:hal:journl:hal-01512787
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01512787
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    1. repec:cje:issued:v:52:y:2019:i:1:p:93-131 is not listed on IDEAS
    2. Ingo Geishecker & Philipp J. H. Schröder & Allan Srensen, 2019. "One-off export events," Canadian Journal of Economics, Canadian Economics Association, vol. 52(1), pages 93-131, February.
    3. repec:eee:inecon:v:112:y:2018:i:c:p:88-108 is not listed on IDEAS
    4. Ottaviano, Gianmarco I.P. & Peri, Giovanni & Wright, Greg C., 2018. "Immigration, trade and productivity in services: Evidence from U.K. firms," Journal of International Economics, Elsevier, vol. 112(C), pages 88-108.
    5. William W. Olney & Dario Pozzoli, 2018. "The Impact of Immigration on Firm-Level Offshoring," Department of Economics Working Papers 2018-02, Department of Economics, Williams College.
    6. Thomas Kemeny & Abigail Cooke, 2018. "Spillovers from immigrant diversity in cities," Journal of Economic Geography, Oxford University Press, vol. 18(1), pages 213-245.
    7. Müller, Benjamin & Ragoussis, Alexandros, 2016. "Minorities and trade: what do we know, and how can policymakers take it into account?," Discussion Papers 11/2016, German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE).
    8. Marchal, Léa & Nedoncelle, Clément, 2017. "How foreign-born workers foster exports," Kiel Working Papers 2071, Kiel Institute for the World Economy (IfW).

    More about this item

    Keywords

    Shift share; Instrumental variable; Export; Ethnic diversity;

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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