Abstract
<p>In this article, we analyze to what extent cultural diversity brought about by immigrants affects economic activity of the Spanish provinces. To do that, we use panel data techniques that treat cultural diversity as an endogenous variable and account for spatial linkages. The dual nature of immigrants in Spain, that is, working and retired migration, is also considered in our regressions. The outcomes reveal that greater cultural diversity stimulates the economic activity of the Spanish provinces, these gains being reinforced in the case of labor-active migrant and for richer provinces. Our results are robust to diverse specifications, estimation methods, and samples.</p>
Highlights
The increasing inequalities between regions, climate change, and the exacerbation of conflicts in some devel‐ oping areas have accentuated the migration flows in the world economy, with the consequent social and eco‐ nomic tension in host countries
For Bove and Elia (2017), the positive effect of cultural diversity prompted by immigration flows is even more consistent in developing economies than in developed ones
We try to disentangle the impact that retired immigrants have on the economic prosperity of the spe‐ cific areas of Spain, where they locate in comparison to the labor immi‐ grants, who come mostly from countries with a lower level of economic development
Summary
The increasing inequalities between regions, climate change, and the exacerbation of conflicts in some devel‐ oping areas have accentuated the migration flows in the world economy, with the consequent social and eco‐ nomic tension in host countries. Several measures of cultural diversity related to international migration have been used in the literature, referring to ethnic identity, social or religious groups, or geographical origin (Bove & Elia, 2017; Longhi, 2013; Nijkamp & Poot, 2015) According to this literature, the increasing diversity of the populations prompted by immigration might yield economic costs and benefits through different channels. After a comprehensive overview of the existing academic papers, we quantify how birthplace diversity brought about by immigration affects the economic activ‐ ity of Spanish provinces This question is of great impor‐ tance for Spain, with a mass‐scale and continuous entry of immigrants in recent years and with an unemployment rate that reached 26% in 2013 (Alamá‐Sabater et al, 2017). To deal with these issues, as a novelty in the migration literature, we employ two‐stage least‐square (2SLS) estimators for spa‐ tial autoregressive models with endogenous regressors and instrumental variables (IV)
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