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Consequences of a Massive Refugee Influx on Firm Performance and Market Structure

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  • Yusuf Emre Akgunduz
  • Yusuf Kenan Bagir
  • Seyit Mumin Cilasun
  • Murat Gunay Kirdar

Abstract

This study combines an administrative dataset of the full population of Turkish firms and the setting of the sudden mass migration of Syrian refugees to Turkey to identify the effect of migrants on firm performance and market structure. As a result of the migrant shock, existing firms expand and new firms are established. Quantitatively, a 10 percentage-point rise in migrant-to-native ratio increases average firm sales by 4% and the number of registered firms by 5%. While the number of firms rises, new firms are more likely to be small. The resulting market structure shows less concentration and firms reduce the share of workers formally employed. We further document an increased propensity to export and an increase in the variety of exported products. The impact on exports is driven by a rise in competitiveness of firms in regions hosting Syrians as a decline in export prices is observed. We also uncover evidence for an effect of migrants’ skills and networks on exports, as the export value and variety of products to the Middle East and North Africa (MENA) region increase more than those to the EU region among exporters while the prices of products exported to the two regions show similar changes.

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  • Yusuf Emre Akgunduz & Yusuf Kenan Bagir & Seyit Mumin Cilasun & Murat Gunay Kirdar, 2021. "Consequences of a Massive Refugee Influx on Firm Performance and Market Structure," Working Papers 2101, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
  • Handle: RePEc:tcb:wpaper:2101
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    Cited by:

    1. Kırdar, Murat G. & López Cruz, Ivan & Türküm, Betül, 2022. "The effect of 3.6 million refugees on crime," Journal of Economic Behavior & Organization, Elsevier, vol. 194(C), pages 568-582.
    2. Murat Demirci & Murat Guray Kirdar, 2021. "The Labor Market Integration of Syrian Refugees in Turkey," Koç University-TUSIAD Economic Research Forum Working Papers 2124, Koc University-TUSIAD Economic Research Forum.
    3. Aracı, Doğu Tan & Demirci, Murat & Kirdar, Murat G., 2021. "Development Level of Hosting Areas and the Impact of Refugees on Natives' Labor Market Outcomes," IZA Discussion Papers 14267, Institute of Labor Economics (IZA).
    4. Çakır, Selcen & Erbay, Elif & Kirdar, Murat G., 2021. "Syrian Refugees and Human Capital Accumulation of Native Children in Turkey," IZA Discussion Papers 14972, Institute of Labor Economics (IZA).
    5. Nizam MelikÅŸah Demirtas & Orhan Torul, 2021. "Intergenerational Income Mobility in Turkey Abstract:," Working Papers 2021/05, Bogazici University, Department of Economics.

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    More about this item

    Keywords

    Refugees; Firm performance; Market structure; Sales; Informality; Exports; Migrant business networks;
    All these keywords.

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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