How Migrant Networks Facilitate Trade: Evidence from Swiss Exports
AbstractThis paper uses Swiss data and two novel instrumental variables to test the channels through which migrants promote trade. Using immigration in France and visa restrictions as instruments for immigrantion in Switzerland, I identify a protrade effect that takes place entirely on the extensive margin, i.e. on the number of products rather than the value of exports. This suggests networks reduce beachhead costs. I also find that migrants networks can substitute for institutions but only when products are differentiated. This suggests that differentiated products are trust-intensive or that migrants substitute for institutions by providing information rather than trust.
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Bibliographic InfoArticle provided by Swiss Society of Economics and Statistics (SSES) in its journal Swiss Journal of Economics and Statistics.
Volume (Year): 148 (2012)
Issue (Month): III (September)
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More information through EDIRC
trade; migration; corruption;
Find related papers by JEL classification:
- F22 - International Economics - - International Factor Movements and International Business - - - International Migration
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
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- 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).
- Felbermayr, Gabriel & Grossmann, Volker & Kohler, Wilhelm, 2012. "Migration, International Trade and Capital Formation: Cause or Effect ?," FSES Working Papers 436, Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland.
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