The effect on economic outcomes of ethnic diversity remains debatable. Some view ethnic diversity as a deterrent of development, whereas others consider it a source of innovation and productivity, which can be translated into a higher level of development. This study aims to shed further light on the issue. Applying instrumental variables estimation to district-level data, we find that ethnic diversity has a significant positive association with nighttime light intensity, which is used as a proxy for level of economic activity. The finding is robust to alternative specifications. Our finding suggests that centuries of interethnic contacts and coexistence may have helped ethnically diverse communities to gain experimental knowledge of the diverse beliefs and social practices and transition it into better economic outcomes.

中文翻译：

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民族多样性和地方经济

种族多样性对经济结果的影响仍然存在争议。一些人将种族多样性视为发展的障碍，而另一些人则认为它是创新和生产力的源泉，可以转化为更高水平的发展。本研究旨在进一步阐明这个问题。将工具变量估计应用于地区级数据，我们发现种族多样性与夜间光照强度呈显着正相关，夜间光照强度用作经济活动水平的代理。该发现对于替代规范是稳健的。我们的研究结果表明，几个世纪以来的种族间接触和共存可能帮助不同种族的社区获得有关不同信仰和社会实践的实验性知识，并将其转化为更好的经济成果。