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Does immigrant employment matter for export sales? Evidence from Denmark

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  • Sanne Hiller

    ()

Abstract

Immigration impacts on the economy in ample ways: it affects growth, wages and total factor productivity. This study deals with the effects of immigration on firm exports. Can firms benefit from hiring immigrants to expand their export sales? Or do immigrants who live in the firm’s region affect trade? In contrast to the existing literature, we are able to distinguish these two distinct channels. Using matched employer-employee data from Denmark for the years 1995–2005, we provide novel insights in the nexus between exports and immigration. We further contribute to the literature by providing first evidence on the adjustment of firms’ product portfolio in response to immigration. Our empirical results are consistent with the claim that immigration lowers barriers to trade. Both, regional immigration and foreign employment matter for the composition of firm-level exports. As a novel insight, our findings suggest that firms benefit from immigration in terms of expanded export sales, when they hire foreign employees. We only find weak evidence for the local presence of foreigners to increase export sales, which we ascribe to the conjecture that at least some trade-cost reducing forces of immigration like for example intercultural knowledge or personal and business networks abroad, can only be accessed or exploited via foreign employment. Copyright Kiel Institute 2013

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File URL: http://hdl.handle.net/10.1007/s10290-013-0146-5
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Bibliographic Info

Article provided by Springer in its journal Review of World Economics.

Volume (Year): 149 (2013)
Issue (Month): 2 (June)
Pages: 369-394

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Handle: RePEc:spr:weltar:v:149:y:2013:i:2:p:369-394

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Related research

Keywords: International trade; Migration; Firm-level analysis; Matched employer-employee data; F10; F22;

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References

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Citations

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Cited by:
  1. Tomohiro MACHIKITA & Yasushi UEKI, 2013. "Who Disseminates Technology to Whom, How, and Why: Evidence from Buyer-Seller Business Networks," Working Papers DP-2013-26, Economic Research Institute for ASEAN and East Asia (ERIA).
  2. Joachim Wagner, 2013. "Micro-econometric studies of international firm activities and firm performance: introduction by guest editor," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 149(1), pages 1-3, March.
  3. Parrotta, Pierpaolo & Pozzoli, Dario & Pytlikova, Mariola, 2012. "The Nexus between Labor Diversity and Firm's Innovation," IZA Discussion Papers 6972, Institute for the Study of Labor (IZA).
  4. Bossler, Mario, 2013. "Recruiting abroad: the role of foreign affinity and labour market scarcity," IAB Discussion Paper 201319, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  5. Parrotta, Pierpaolo & Pozzoli, Dario & Sala, Davide, 2014. "Ethnic Diversity and Firms' Export Behavior," Discussion Papers of Business and Economics 2/2014, Department of Business and Economics, University of Southern Denmark.
  6. Cristina Mitaritonna & Gianluca Orefice & Giovanni Peri, 2014. "Immigrants and Firms' Productivity: Evidence from France," Working Papers 2014-09, CEPII research center.

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