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Does Birthplace Diversity Affect Economic Complexity? Cross-country Evidence

Dany Bahar (), Hillel Rapoport and Riccardo Turati ()

No 125a, CID Working Papers from Center for International Development at Harvard University

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: 2020-03
New Economics Papers: this item is included in nep-dem, nep-gro, nep-int and nep-tid
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https://growthlab.cid.harvard.edu/files/growthlab/ ... nomic-complexity.pdf (application/pdf)

Related works:
Working Paper: Does Birthplace Diversity affect Economic Complexity? Cross-country Evidence (2020) Downloads
Working Paper: Does Birthplace Diversity Affect Economic Complexity? Cross-Country Evidence (2020) Downloads
Working Paper: Does Birthplace Diversity Affect Economic Complexity? Cross-Country Evidence (2019) Downloads
Working Paper: Does Birthplace Diversity Affect Economic Complexity ? Cross-Country Evidence (2019) Downloads
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