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Does Immigration Help to Explain Intra-Industry Trade? Evidence for Spain

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Abstract

This paper argues and provides evidence that the stock of immigrants in a country have a positive effect on the share of its bilateral intra-industry trade (IIT). The paper links the literatures about immigration and trade and about IIT determinants. The key is that immigration contributes to trade transaction costs reduction and this would benefit more intra than inter-industry trade. We test this hypothesis using Spanish data and departing from the models developed by Helpman (1987). Immigration helps more IIT in manufactures and IIT between Spain and less developed countries. Results are robust both to different estimation methods and specifications.

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Paper provided by Centro de Estudios Andaluces in its series Economic Working Papers at Centro de Estudios Andaluces with number E2004/29.

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Length: 25 pages
Date of creation: 2004
Date of revision:
Handle: RePEc:cea:doctra:e2004_29

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Keywords: Intra-industry trade; immigration.;

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  1. Flam, Harry & Helpman, Elhanan, 1987. "Vertical Product Differentiation and North-South Trade," American Economic Review, American Economic Association, American Economic Association, vol. 77(5), pages 810-22, December.
  2. Carmen Mora, 2002. "The role of comparative advantage in trade within industries: A panel data approach for the European Union," Review of World Economics (Weltwirtschaftliches Archiv), Springer, Springer, vol. 138(2), pages 291-316, June.
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  8. David Greenaway & Robert Hine & Chris Milner, 1994. "Country-specific factors and the pattern of horizontal and vertical intra-industry trade in the UK," Review of World Economics (Weltwirtschaftliches Archiv), Springer, Springer, vol. 130(1), pages 77-100, March.
  9. Helpman, Elhanan, 1987. "Imperfect competition and international trade: Evidence from fourteen industrial countries," Journal of the Japanese and International Economies, Elsevier, vol. 1(1), pages 62-81, March.
  10. Sourafel Girma & Zhihao Yu, 2002. "The link between immigration and trade: Evidence from the United Kingdom," Review of World Economics (Weltwirtschaftliches Archiv), Springer, Springer, vol. 138(1), pages 115-130, March.
  11. Greenaway, David & Milner, Chris R, 1983. "On the Measurement of Intra-Industry Trade," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 93(372), pages 900-908, December.
  12. José Blanes & Carmela Martín, 2000. "The nature and causes of intra-industry trade: Back to the comparative advantage explanation? The case of Spain," Review of World Economics (Weltwirtschaftliches Archiv), Springer, Springer, vol. 136(3), pages 423-441, 09.
  13. Joan Martín-Montaner & Vicente Ríos, 2002. "Vertical specialization and intra-industry trade: The role of factor endowments," Review of World Economics (Weltwirtschaftliches Archiv), Springer, Springer, vol. 138(2), pages 340-365, June.
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Cited by:
  1. Tadesse, Bedassa & White, Roger, 2008. "Do immigrants counter the effect of cultural distance on trade? Evidence from US state-level exports," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, Elsevier, vol. 37(6), pages 2304-2318, December.
  2. José Vicente Blanes Cristóbal & Juliette Milgram Baleix, 2006. "Impacto de la liberalización comercial de Marruecos y de la inmigración marroquí sobre las exportaciones de las CCAA españolas hacia Marruecos," Economic Working Papers at Centro de Estudios Andaluces, Centro de Estudios Andaluces E2006/14, Centro de Estudios Andaluces.
  3. Horácio C. Faustino & Nuno Carlos Leitão, 2008. "Immigration and Trade in Portugal: A Static and Dynamic Panel Data Analysis," Working Papers Department of Economics, ISEG - School of Economics and Management, Department of Economics, University of Lisbon 2008/31, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
  4. Nuno Carlos Leitão, 2013. "The Impact of Immigration on Portuguese Intra-Industry Trade," Working Papers, Fondazione Eni Enrico Mattei 2013.20, Fondazione Eni Enrico Mattei.
  5. Mahmut Yasar & David Lisner & Roderick Rejesus, 2012. "Bilateral trade impacts of temporary foreign visitor policy," Review of World Economics (Weltwirtschaftliches Archiv), Springer, Springer, vol. 148(3), pages 501-521, September.
  6. Giovanni Peri & Francisco Requena-Silvente, 2010. "The trade creation effect of immigrants: evidence from the remarkable case of Spain," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 43(4), pages 1433-1459, November.
  7. Horácio Faustino & Isabel Proença, 2011. "Effects of Immigration on Intra-Industry Trade: A logit analysis," Working Papers Department of Economics, ISEG - School of Economics and Management, Department of Economics, University of Lisbon 2011/19, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
  8. Capuano, Stella & Marfouk, Abdeslam, 2013. "African brain drain and its impact on source countries: What do we know and what do we need to know?," MPRA Paper 47944, University Library of Munich, Germany.
  9. Giovanni Peri & Francisco Requena, 2009. "The Trade Creation Effect of Immigrants: Testing the Theory on the Remarkable case of Spain," Development Working Papers, Centro Studi Luca d\'Agliano, University of Milano 275, Centro Studi Luca d\'Agliano, University of Milano.
  10. Horácio Faustino & João Peixoto, 2009. "Immigration-Trade Links: The Impact of Recent Immigration on Portuguese Trade," Working Papers Department of Economics, ISEG - School of Economics and Management, Department of Economics, University of Lisbon 2009/36, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
  11. Ben Dolman, 2007. "Patterns of Migration, Trade and Foreign Direct Investment across OECD Countries," DEGIT Conference Papers, DEGIT, Dynamics, Economic Growth, and International Trade c012_030, DEGIT, Dynamics, Economic Growth, and International Trade.
  12. José V. Blanes & Juliette Milgram Baleix, 2006. "The Free Trade Agreement Morocco-EU: a simulation of the impact on EU exports," ThE Papers, Department of Economic Theory and Economic History of the University of Granada. 06/09, Department of Economic Theory and Economic History of the University of Granada..
  13. Horácio C. Faustino & Nuno C. Leitão, 2006. "Portuguese Intra-Industry Trade: A Dynamic Panel Data Analysis," Working Papers Department of Economics, ISEG - School of Economics and Management, Department of Economics, University of Lisbon 2006/21, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
  14. Katarzyna Budnik, 2011. "Temporary migration in theories of international mobility of labour," Bank i Kredyt, National Bank of Poland, Economic Institute, National Bank of Poland, Economic Institute, vol. 42(6), pages 7-48.
  15. Dilip Ratha & Sanket Mohapatra & Caglar Ozden & Sonia Plaza & William Shaw & Abebe Shimeles, 2011. "Leveraging Migration for Africa : Remittances, Skills, and Investments," World Bank Publications, The World Bank, number 2300, August.
  16. Valerija Botrić, 2013. "Determinants of Intra-industry Trade between Western Balkans and EU-15: Evidence from Bilateral Data," International Journal of Economic Sciences and Applied Research (IJESAR), Technological Educational Institute (TEI) of Kavala, Greece, Technological Educational Institute (TEI) of Kavala, Greece, vol. 6(2), pages 7-23, September.
  17. Faqin Lin, 2011. "The pro-trade impacts of immigrants: a meta-analysis of network effects," Journal of Chinese Economic and Foreign Trade Studies, Emerald Group Publishing, Emerald Group Publishing, vol. 4(1), pages 17-27, February.
  18. José Vicente Blanes Cristóbal & Juliette Milgram Baleix, 2006. "The Free Trade Agreement Morocco-EU: A simulation of the impact on bilateral flows," Economic Working Papers at Centro de Estudios Andaluces, Centro de Estudios Andaluces E2006/23, Centro de Estudios Andaluces.
  19. White, Roger & Tadesse, Bedassa, 2008. "Immigrants, cultural distance and U.S. state-level exports of cultural products," The North American Journal of Economics and Finance, Elsevier, Elsevier, vol. 19(3), pages 331-348, December.
  20. Balogun, Emmanuel Dele, 2007. "Exchange rate policy and export performance of WAMZ countries," MPRA Paper 6233, University Library of Munich, Germany.
  21. Balogun, Emmanuel Dele, 2007. "Effects of exchange rate policy on bilateral export trade of WAMZ countries," MPRA Paper 6234, University Library of Munich, Germany.

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