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Does Birthplace Diversity Affect Economic Complexity? Cross-country Evidence

 
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Author
Bahar, DanyHARVARD
Rapoport, HillelHARVARD
Turati, Riccardo
Published Version
https://www.hks.harvard.edu/centers/cid/publications/fellow-graduate-student-working-papers
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Citation
Bahar, Dany, Hillel Rapoport, and Riccardo Turati. “Does Birthplace affect Economic Complexity? Cross-country Evidence.” CID Research Fellow and Graduate Student Working Paper Series 2020.125, Harvard University, Cambridge, MA, March 2020.
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.
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This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#LAA
Citable link to this page
https://nrs.harvard.edu/URN-3:HUL.INSTREPOS:37366848

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