Do migrants affect the local product mix? An analysis of the effects and underlying mechanisms

Migration, knowledge diffusion and the comparative advantage of nations

Elizabeth J Casabianca, Alessia Lo Turco and Daniela Maggioni

Journal of Economic Geography, 2022, vol. 22, issue 4, 755-777

Abstract: We study the impact of immigration on the product mix of the receiving economy by combining information on the local presence of immigrants with a highly detailed definition of the set of goods produced by Italian provinces. For the period 2002–2011, we find that an increase in the share of migrants shifts the manufacturing output composition of host provinces in favour of less capital intensive products. This evidence is based on an IV strategy resting on the settlement of immigrants in the pre-sample period and is robust to several sensitivity checks. We shed light on two mechanisms potentially driving our result. On the one hand, we show that immigration reduces provinces’ dependence on imports of low capital intensity intermediate goods. On the other hand, immigration fosters relatively more the creation of new firms in local low capital intensity industries.

Keywords: Immigration; local production structure; capital intensity (search for similar items in EconPapers)
JEL-codes: F16 F22 J61 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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