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Immigrants and Firms' Productivity: Evidence from France

Listed author(s):
  • Mitaritonna, Cristina

    ()

    (CEPII, Paris)

  • Orefice, Gianluca

    ()

    (CEPII, Paris)

  • Peri, Giovanni

    ()

    (University of California, Davis)

Immigrants may complement native workers, increase productivity, allow specialization by skill in the firm and lower costs. These effects could be beneficial for the firm and increase its productivity and profits. However not all firms use immigrants. Allowing firms to have differential fixed cost in hiring immigrants we analyze the impact of an increase in local supply of immigrants on firms' immigrant employment and firm's productivity. Using micro-level data on French firms, we show that a supply-driven increase in foreign born workers in a department (location) increases the productivity of firms in that department. We also find that this effect is significantly stronger for firms with initially zero level of foreign employment. Those are also the firms whose share of immigrants increases the most. We also find that the positive productivity effect of immigrants is associated with faster growth of capital and improved export performances of the firms. Finally we find a positive effect of immigration on wages of natives and on specialization of natives in complex occupations, that is common to all firms in the department.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 8063.

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Length: 55 pages
Date of creation: Mar 2014
Handle: RePEc:iza:izadps:dp8063
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  1. De New, John P & Zimmermann, Klaus F, 1994. "Native Wage Impacts of Foreign Labor: A Random Effects Panel Analysis," Journal of Population Economics, Springer;European Society for Population Economics, vol. 7(2), pages 177-192.
  2. Gianmarco I. P. Ottaviano & Giovanni Peri & Gregory Wright, 2013. "Immigration, offshoring, and American jobs," LSE Research Online Documents on Economics 48819, London School of Economics and Political Science, LSE Library.
  3. Trax, Michaela & Brunow, Stephan & Suedekum, Jens, 2012. "Cultural Diversity and Plant‐Level Productivity," IZA Discussion Papers 6845, Institute for the Study of Labor (IZA).
  4. Anette Haas & Michael Lucht, 2013. "Heterogeneous Firms and Imperfect Substitution: The Productivity Effect of Migrants," Norface Discussion Paper Series 2013019, Norface Research Programme on Migration, Department of Economics, University College London.
  5. Hatzigeorgiou, Andreas & Lodefalk, Magnus, 2011. "Trade and Migration: Firm-Level Evidence," Working Papers 2011:39, Lund University, Department of Economics.
  6. Andrew B. Bernard & Jonathan Eaton & J. Bradford Jenson & Samuel Kortum, 2000. "Plants and Productivity in International Trade," NBER Working Papers 7688, National Bureau of Economic Research, Inc.
  7. Malchow-Møller, Nikolaj & Munch, Jakob R. & Skaksen, Jan Rose, 2007. "Do Immigrants Affect Firm-Specific Wages?," IZA Discussion Papers 3264, Institute for the Study of Labor (IZA).
  8. Giovanni Peri & Chad Sparber, 2008. "Task Specialization, Immigration, and Wages," CReAM Discussion Paper Series 0802, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  9. Bernard, Andrew B. & Bradford Jensen, J., 1999. "Exceptional exporter performance: cause, effect, or both?," Journal of International Economics, Elsevier, vol. 47(1), pages 1-25, February.
  10. Ilke Van Beveren, 2007. "Total factor productivity estimation: A practical review," LICOS Discussion Papers 18207, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  11. Sanne Hiller, 2013. "Does immigrant employment matter for export sales? Evidence from Denmark," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 149(2), pages 369-394, June.
  12. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," The Quarterly Journal of Economics, Oxford University Press, vol. 118(4), pages 1335-1374.
  13. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
  14. George J. Borjas, 2003. "The Labor Demand Curve is Downward Sloping: Reexamining the Impact of Immigration on the Labor Market," NBER Working Papers 9755, National Bureau of Economic Research, Inc.
  15. Pedro S. Martins, Matloob Piracha and José Varejão, 2013. "Do Immigrants Displace Native Workers? Evidence from Matched Panel Data," Working Papers 44, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
  16. Christian Dustmann & Tommaso Frattini & Ian Preston, 2008. "The Effect of Immigration along the Distribution of Wages," CReAM Discussion Paper Series 0803, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  17. Andri Chassamboulli & Theodore Palivos, 2013. "The impact of immigration on the employment and wages of native workers," Working Papers 160, Bank of Greece.
  18. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 317-341.
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