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Birthplace diversity and economic complexity: Cross-country evidence

Dany Bahar, Hillel Rapoport and Riccardo Turati

Research Policy, 2022, vol. 51, issue 8

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 countries with higher birthplace diversity by one standard deviation are more economically complex by 0.1 to 0.18 standard deviations above the mean. This holds particularly for diversity among highly educated migrants and for countries at intermediate levels of economic complexity. 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.

Keywords: Economic complexity; Birthplace diversity; Immigration; Growth (search for similar items in EconPapers)
JEL-codes: F22 O31 O33 (search for similar items in EconPapers)
Date: 2022
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Related works:
Working Paper: Birthplace diversity and economic complexity: Cross-country evidence (2022)
Working Paper: Birthplace diversity and economic complexity: Cross-country evidence (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:respol:v:51:y:2022:i:8:s0048733320300718

DOI: 10.1016/j.respol.2020.103991

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