The link between immigration and trade in developing countries
AbstractInternational trade can foster economic development. This paper examines the link between immigration from developing countries to OECD countries and their bilateral trade; it also explores some possible mechanism behind this link. It uses a gravity equation for trade augmented by an immigrant stock variable and a set of control variables. The immigrants’ variable enters the estimated equation in different ways depending on immigrants’ relevant characteristics both individual and non individual-specific. Results show that in developing countries there is a positive link between immigration and both exports and imports. We find evidence for the trade transaction cost channel but not for the preference one. We identify the social or ethnic network effect as the mechanism behind this link since immigrants related to business activities are the ones who have a positive effect on bilateral trade.
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Bibliographic InfoPaper provided by Asociación Española de Economía y Finanzas Internacionales in its series Working Papers with number 10-07.
Length: 39 pages
Date of creation: Oct 2010
Date of revision:
International Trade; Migration; Economic Development.;
Find related papers by JEL classification:
- F10 - International Economics - - Trade - - - General
- F22 - International Economics - - International Factor Movements and International Business - - - International Migration
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-10-23 (All new papers)
- NEP-DEV-2010-10-23 (Development)
- NEP-INT-2010-10-23 (International Trade)
- NEP-MIG-2010-10-23 (Economics of Human Migration)
You can help add them by filling out this form.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- The Link Between Immigration and Trade in Developing Countries
by Ariel Goldring in Free Market Mojo on 2010-11-11 12:00:28
- 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.
- 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).
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