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Temporary Migration and Bilateral Trade Flows

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Author Info

  • Marion Jansen
  • Roberta Piermartini

Abstract

Empirical evidence on migration and trade has established that permanent migration promotes trade. This finding has been interpreted as proof for the role of migrants in reducing trade-related transaction costs such as contract enforcement costs or information costs. This paper contributes to improving our understanding of trade-related transaction costs by analysing empirically whether temporary migrants, like permanent migrants, have an impact on bilateral trade flows. Temporary migrants can be expected to be less integrated in the host country than permanent migrants. At the same time, their knowledge of the home country can, on average, be expected to be more up-to-date. Our findings therefore give insights as to the relative importance of knowledge on the host and the home country for trade-related transaction costs. Using a gravity approach in our empirical analysis, we find that temporary migration has a positive and significant effect on trade and that temporary migration tends to have a stronger and more significant effect on both imports and exports than permanent migration. Interestingly, the role of temporary migrants in reducing trade costs does not appear to be associated with their skills. Copyright 2009 The Authors. Journal compilation 2009 Blackwell Publishing Ltd.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal World Economy.

Volume (Year): 32 (2009)
Issue (Month): 5 (05)
Pages: 735-753

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Handle: RePEc:bla:worlde:v:32:y:2009:i:5:p:735-753

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0378-5920

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Cited by:
  1. Giuseppe Bertola & Lorenza Mola, 2010. "Services Provision and Temporary Mobility: Freedoms and Regulation in the EU," The World Economy, Wiley Blackwell, vol. 33(4), pages 633-653, 04.
  2. Peter H. Egger & Maximilian von Ehrlich & Douglas R. Nelson, 2012. "Migration and Trade," The World Economy, Wiley Blackwell, vol. 35(2), pages 216-241, 02.
  3. Faqin Lin, 2011. "The pro-trade impacts of immigrants: a meta-analysis of network effects," Journal of Chinese Economic and Foreign Trade Studies, Emerald Group Publishing, vol. 4(1), pages 17-27, February.
  4. Felbermayr, Gabriel & Grossmann, Volker & Kohler, Wilhelm, 2012. "Migration, International Trade and Capital Formation: Cause or Effect?," IZA Discussion Papers 6975, Institute for the Study of Labor (IZA).
  5. Murat Genc & Masood Gheasi & Peter Nijkamp & Jacques Poot, 2011. "The impact of immigration on international trade: a meta-analysis," Norface Discussion Paper Series 2011020, Norface Research Programme on Migration, Department of Economics, University College London.
  6. Lee, Jaehwa, 2012. "Network effects on international trade," Economics Letters, Elsevier, vol. 116(2), pages 199-201.

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