Ethnic diversity and firms' export behavior

Pierpaolo Parrotta, Dario Pozzoli, Davide Sala

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    Abstract

    Media are reporting of companies that are increasing the diversity of their workforce to expand their business internationally. This paper investigates whether these examples constitute pieces of evidence that diversity promotes firms' internationalization. Indeed, diverse companies are like a cosmopolitan world in small scale, in which their employees learn to relate to other cultures. This improves firms' relational capital and ability to market products internationally. To address endogeneity issues, we rely on several empirical strategies, one of which is centered on the well established "shift share" method. Our results are robust across all empirical models, confirming the hypothesis that ethnic diversity favors firms' engagement on international markets. 

    Original languageEnglish
    Pages (from-to)248-263
    Number of pages16
    JournalEuropean Economic Review
    Volume89
    DOIs
    Publication statusPublished - Oct 2016

    Keywords

    • Ethnic diversity
    • Export
    • Instrumental variable
    • Shift share
    • INTERNATIONAL-TRADE
    • LABOR DIVERSITY
    • INSTRUMENTAL VARIABLES
    • WAGES
    • IDENTIFICATION
    • ECONOMETRICS
    • PERFORMANCE
    • IMMIGRATION
    • INNOVATION
    • ECONOMICS

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