Template-Type: ReDIF-Paper 1.0
Author-Name: Dany Bahar
Author-Workplace-Name: Center for International Development at Harvard University
Author-Person: pba1149
Author-Name: Hillel Rapoport
Author-Name: Riccardo Turati
Title: Does Birthplace Diversity Affect Economic Complexity? Cross-country Evidence
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.
Creation-Date: 2020-03
Classification-JEL: F22, O31, O33
Keywords: economic complexity, birthplace diversity, immigration, growth
Number: 154
Handle: RePEc:glh:wpfacu:154
File-Url: https://growthlab.cid.harvard.edu/files/growthlab/files/2020-03-cid-fellows-wp-125-diversity-economic-complexity.pdf
File-Format: application/pdf