Category: Published Articles

Dario Diodato, Ricardo Hausmann, and Frank Neffke (2023), Journal of Urban Economics Vol.135

How does return migration from the US to Mexico affect local workers? Return migrants increase the local labor supply, potentially hurting local workers. However, having been exposed to a more advanced U.S. economy, they may also carry human capital that benefits non-migrants. Using an instrument based on involuntary return migration, we find that, whereas workers who share returnees’ occupations experience a fall in wages, workers in other occupations see their wages rise. These effects are, however, transitory and restricted to the city-industry receiving the returnees. In contrast, returnees permanently alter a city’s long-run industrial composition, by raising employment levels in the local industries that hire them.

 

Andrea Morrison, Sergio Petralia, and Dario Diodato (2022),  Journal of Economic Geography Vol.22(2)

More than 30 million people migrated to the USA between late-ninetieth and early-twentieth century, and thousands became inventors. Drawing on a novel dataset of immigrant inventors in the USA, we assess the city-level impact of immigrants’ patenting and their contribution to the technological specialization of the receiving US regions between 1870 and 1940. Our results show that native inventors benefited from the inventive activity of immigrants. In addition, we show that the knowledge transferred by immigrants gave rise to new and previously not exiting technological fields in the US regions where immigrants moved to.

 

Dario Diodato, Frank Neffke, and Neave O’Clery (2018), Journal of Urban Economics Vol.106. 1-26.

The fact that firms benefit from close proximity to other firms with which they can exchange inputs, skilled labor or know-how helps explain why many industrial clusters are so successful. Studying the evolution of coagglomeration patterns, we show that the type of agglomeration that benefits firms has drastically changed over the course of a century and differs markedly across industries. Whereas, at the beginning of the twentieth century, industries tended to colocate with their value chain partners, in more recent decades the importance of this channel has declined and colocation seems to be driven more by similarities in industries’ skill requirements. By calculating industry-specific Marshallian agglomeration forces, we are able to show that, today, skill-sharing is the most salient motive behind the location choices of services, whereas value chain linkages still explain much of the colocation patterns in manufacturing. Moreover, the estimated degrees to which labor and input-output linkages are reflected in an industry’s coagglomeration patterns help improve predictions of city-industry employment growth.

Dario Diodato, Franco Malerba, and Andrea Morrison (2018),  European Economic Review Vol.101. 297-329.

Change in industrial leadership is often explained in terms of technological and costs advantages. However firms in emerging economies not only have to produce high quality, cost-competitive goods, but also win the resistance of consumers in the world market, who are often adverse to purchasing products from countries that yet have to build a reputation. We argue that this country-of-origin bias significantly influences the chances of leadership change.
A model that aims at capturing the endogenous dynamics of demand building and leapfrogging is proposed. We show that in sectors with high monopoly power acquiring a superior technology is not sufficient for a latecomer country to become leader, unless a significant share of consumers is aware of the quality of its products. An extension of the model to multiple sectors shows that a latecomer country remains specialized into low-value undifferentiated goods, even after overtaking the technology of the leading country.

Dario Diodato and Anet Weterings (2015), Journal of Economic Geography  Vol.15-4. 723-742.

To date, theoretical and empirical insights in the determinants of regional resilience are still limited. Using a model, we explore how three regional factors jointly contribute to the resilience of regional labour markets to economic shocks. The localization of the supply network (1) is used to model the propagation of the shock, while possibilities for intersectoral (2) and interregional labour mobility (3) to analyse the recovery. An application of the model to Dutch data suggests that labour markets in centrally located and service-oriented regions have, on average, a higher recovery speed, irrespective of the type of shock hitting the economy.