Impact of Ethnic Diversity on Territorial Economic Resilience

The relationship between ethnic diversity and economic outcomes is ambiguous. In the scientific literature, researchers receive evidence of both the positive and negative effects of ethnic diversity on economic growth. Moreover, the positive impact of ethnic diversity is often found when considering a small territory, while at the national level the consequences for the economy are usually negative. This work attempts to study the relationship between different indices of ethnic diversity (the index of fractionation and the index of polarization) and the characteristics of local economic resistance. The observations in the linear regression model are casually constructed cells measuring 1 degree of longitude by 1 degree of latitude. Using stable night light as a proxy variable for economic activity, the metric of recoverability for the period 2000-2008, resistance for 2008-2009 and recoverability for 2009-2013 is calculated. The results of constructing regressions do not provide an answer about the direction of action of ethnic diversity. For recoverability after a transformational recession, we find evidence of a positive effect of ethnic diversity on local economic resilience, and also confirm the dependence on the size of the territory under consideration. For the recoverability of 2009-2013, it is impossible to make an answer.