Immigrants and Firms' Productivity: Evidence from France

55 Pages Posted: 5 Apr 2014

See all articles by Cristina Mitaritonna

Cristina Mitaritonna

Centre d'Etudes Prospectives et d'Info. Internationales (CEPII)

Gianluca Orefice

World Trade Organization (WTO)

Giovanni Peri

University of California, Davis - Department of Economics

Abstract

Immigrants may complement native workers, increase productivity, allow specialization by skill in the firm and lower costs. These effects could be beneficial for the firm and increase its productivity and profits. However not all firms use immigrants. Allowing firms to have differential fixed cost in hiring immigrants we analyze the impact of an increase in local supply of immigrants on firms' immigrant employment and firm's productivity.Using micro-level data on French firms, we show that a supply-driven increase in foreign born workers in a department (location) increases the productivity of firms in that department. We also find that this effect is significantly stronger for firms with initially zero level of foreign employment. Those are also the firms whose share of immigrants increases the most. We also find that the positive productivity effect of immigrants is associated with faster growth of capital and improved export performances of the firms. Finally we find a positive effect of immigration on wages of natives and on specialization of natives in complex occupations, that is common to all firms in the department.

Keywords: immigrants, firms, productivity, heterogeneity, fixed costs of hiring

JEL Classification: F22, E25, J61

Suggested Citation

Mitaritonna, Cristina and Orefice, Gianluca and Peri, Giovanni, Immigrants and Firms' Productivity: Evidence from France. IZA Discussion Paper No. 8063. Available at SSRN: https://ssrn.com/abstract=2420708

Cristina Mitaritonna (Contact Author)

Centre d'Etudes Prospectives et d'Info. Internationales (CEPII) ( email )

9 rue Georges Pitard
Paris Cedex 15, F-75015
France

Gianluca Orefice

World Trade Organization (WTO) ( email )

Rue de Lausanne 154
Geneva 21, CH-1211
Switzerland

Giovanni Peri

University of California, Davis - Department of Economics ( email )

One Shields Drive
Davis, CA 95616-8578
United States
530-752-3033 (Phone)
530-752-9382 (Fax)

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