A1 - Dany Bahar
A1 - Hillel Rapoport
A1 - Riccardo Turati
TI - Does Birthplace Diversity affect Economic Complexity? Cross-country Evidence
IS - 2020-01
T3 - Working Papers
KW - Economic Complexity
KW - Birthplace Diversity
KW - Immigration
KW - Growth
N2 - 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 birthplace diversity is strongly and positively associated with economic complexity. This holds particularly for diversity among highly educated migrants and for countries at intermediate levels of economic complexity. The results are robust to accounting for previous trends in birthplace diversity as well as to using alternatives diversity measures. 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.
ER -