Economic debate about the consequences of immigration in Germany has largely focused on the wage effects for natives at an aggregate level. Especially the role of imperfect substitutability of migrants and natives gained importance. A new topic is to focus on the firm level by estimating...

Empirical evidence for the US shows that migrants increase the productivity of regions. To explain the impact of migrants on the average firm productivity we construct a general equilibrium model with monopolistic competition a la Melitz (2003). We consider heterogeneous firms with different...