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Trade and migration flows between some CEE countries and the UK

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Author Info

  • Subrata Ghatak
  • Monica Ioana Pop Silaghi
  • Vince Daly

Abstract

The recent enlargement of the European Union (EU) has enhanced interest in the causes and also the consequences of migration between Central and Eastern European (CEE) and Western European countries. This paper considers the possibility that some of these consequences make themselves felt in the trade flows between migrants' countries of origin and destination. Using a panel of data covering a number of CEE countries between 1996 and 2003, we employ an augmented gravity model to examine the effects of immigration from these transition countries on their bilateral trade flows with the UK. We pay attention to a number of issues that have been raised within the literature on gravity models. We find evidence that migration positively enhances the bilateral exports of the migrants' home country; however, there is less (but some) evidence that the imports from their destination country are also enhanced.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal The Journal of International Trade & Economic Development.

Volume (Year): 18 (2009)
Issue (Month): 1 ()
Pages: 61-78

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Handle: RePEc:taf:jitecd:v:18:y:2009:i:1:p:61-78

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Related research

Keywords: trade; migration; gravity models;

References

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  1. Dunlevy, James A. & Hutchinson, William K., 2001. "The Pro-Trade Effect of Immigration on American Exports During the Late Nineteenth and Early Twentieth Centuries," IZA Discussion Papers 375, Institute for the Study of Labor (IZA).
  2. S. Piperakis, Andromachi, 2003. "Immigration, Trade Costs and Trade: Gravity Evidence for Greece," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 18, pages 750-762.
  3. Min, Pyong Gap, 1990. "Korean Immigrants in Los Angeles," Institute for Social Science Research, Working Paper Series qt2w76n5vs, Institute for Social Science Research, UCLA.
  4. I-Hui Cheng & Howard J. Wall, 2004. "Controlling for heterogeneity in gravity models of trade and integration," Working Papers 1999-010, Federal Reserve Bank of St. Louis.
  5. Inmaculada Martínez-Zarzoso & Felicitas Nowak-Lehmann, 2003. "Augmented Gravity Model: An Empirical Application to Mercosur-European Union Trade Flows," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 291-316, November.
  6. Jakab, Zoltan M. & Kovacs, Mihaly A. & Oszlay, Andras, 2001. "How Far Has Trade Integration Advanced?: An Analysis of the Actual and Potential Trade of Three Central and Eastern European Countries," Journal of Comparative Economics, Elsevier, vol. 29(2), pages 276-292, June.
  7. Bussière, Matthieu & Fidrmuc, Jarko & Schnatz, Bernd, 2005. "Trade integration of Central and Eastern European countries: lessons from a gravity model," Working Paper Series 0545, European Central Bank.
  8. Tim Hatton, 2004. "Explaining Trends in UK Immigration," ANU Working Papers in Economics and Econometrics 2004-440, Australian National University, College of Business and Economics, School of Economics.
  9. Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-16, March.
  10. Subrata Ghatak & Alan Mulhern & John Watson, 2008. "Inter-Regional Migration in Transition Economies: The Case of Poland," Review of Development Economics, Wiley Blackwell, vol. 12(1), pages 209-222, 02.
  11. David Karemera & Victor Iwuagwu Oguledo & Bobby Davis, 2000. "A gravity model analysis of international migration to North America," Applied Economics, Taylor & Francis Journals, vol. 32(13), pages 1745-1755.
  12. Kao, Chihwa, 1999. "Spurious regression and residual-based tests for cointegration in panel data," Journal of Econometrics, Elsevier, vol. 90(1), pages 1-44, May.
  13. Keith Head & John Ries, 1998. "Immigration and Trade Creation: Econometric Evidence from Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 31(1), pages 47-62, February.
  14. Christian Dustmann & Tim Hatton & Ian Preston, 2005. "The Labour Market Effects of Immigration," Economic Journal, Royal Economic Society, vol. 115(507), pages F297-F299, November.
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Citations

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Cited by:
  1. Johan Fourie & Maria Santana-Gallego, 2012. "Ethnic Reunion and Cultural Affinity," Working Papers 293, Economic Research Southern Africa.
  2. Genc, Murat & Gheasi, Masood & Nijkamp, Peter & Poot, Jacques, 2011. "The Impact of Immigration on International Trade: A Meta-Analysis," IZA Discussion Papers 6145, Institute for the Study of Labor (IZA).
  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. Leitão, Nuno Carlos & Tripathi, Sabyasachi, 2013. "Portuguese Trade and European Union: The Gravity Model," MPRA Paper 45994, University Library of Munich, Germany.
  5. Tripathi, Sabyasachi & Leitão, Nuno Carlos, 2013. "India’s Trade and Gravity Model: A Static and Dynamic Panel Data," MPRA Paper 45502, University Library of Munich, Germany.
  6. Peter Egger & Maximilian Von Ehrlich & Douglas R. Nelson, 2011. "Migration and Trade," CESifo Working Paper Series 3467, CESifo Group Munich.

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