Birthplace Diversity of Immigrants, Capabilities and Export Structure Transformation

Recent studies have shown that export structure transformation matters for sustainable economic growth, but what drives export structure transformation remains an open question. Using data from 56 countries for the years 1990 and 2000, this paper investigates whether birthplace diversity of immigrants facilitates export structure transformation (measured by diversification and ubiquity of exports) of destination countries. Our empirical results show that birthplace diversity of immigrants leads to more diversified and less ubiquitous export structure, and this effect applies to birthplace diversity of both skilled and unskilled immigrant groups. Birthplace diversity of immigrants affects export structure through increasing production capabilities within destination countries. Production capabilities increase through pooling and creating effects of birthplace diversity of immigrants