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Migration and Trade

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  • Peter H. Egger
  • Maximilian von Ehrlich
  • Douglas R. Nelson

Abstract

Theoretical and empirical research in economics suggests that bilateral migration triggers bilateral trade through a number of channels. This paper assesses the functional form of the impact of migration on trade flows in a quasi-experimental setting. We provide evidence that the relationship is not log-linear. In particular, at small levels of migration (stocks) the elasticity of trade to migration is quite high, and it declines to zero at about 4,000 immigrants. If migration stocks exceed such a level, the evidence suggests that trade will not increase anymore. This suggests that cross-country network and other effects flowing from migration materialize at relatively low levels of migration, but there appears to be satiation as immigrant numbers increase by much.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal The World Economy.

Volume (Year): 35 (2012)
Issue (Month): 2 (02)
Pages: 216-241

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Handle: RePEc:bla:worlde:v:35:y:2012:i:2:p:216-241

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Citations

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Cited by:
  1. Serrano-Domingo, Guadalupe & Requena-Silvente, Francisco, 2013. "Re-examining the migration–trade link using province data: An application of the generalized propensity score," Economic Modelling, Elsevier, vol. 32(C), pages 247-261.
  2. Michael Good, 2013. "Geographic Proximity and the Pro-trade Effect of Migration: State-level Evidence from Mexican Migrants in the United States," 2013 Papers pgo530, Job Market Papers.
  3. 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).
  4. Ernest Miguélez, 2014. "Inventor Diasporas and the Internalionalization of Technology," CReAM Discussion Paper Series 1425, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  5. Michael Good, 2012. "How Localized is the Pro-trade Effect of Immigration? Evidence from Mexico and the United States," Working Papers 1203, Florida International University, Department of Economics.
  6. Johan Fourie & Maria Santana-Gallego, 2012. "Ethnic Reunion and Cultural Affinity," Working Papers 293, Economic Research Southern Africa.
  7. Guadalupe Serrano-Domingo & Francisco Requena-Silvente, 2013. "Examining the non-linear relationship between migration and trade," Working Papers 1310, Department of Applied Economics II, Universidad de Valencia.
  8. Marina Murat, 2012. "Out of sight, not out of mind. Education networks and international trade," Center for Economic Research (RECent) 087, University of Modena and Reggio E., Dept. of Economics.
  9. 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.
  10. Sanne Hiller, 2013. "Does immigrant employment matter for export sales? Evidence from Denmark," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 149(2), pages 369-394, June.
  11. Marina Murat, 2013. "Education ties and investments abroad. Empirical evidence from the US and UK," Center for Economic Research (RECent) 091, University of Modena and Reggio E., Dept. of Economics.

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