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Migration and Trade

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  • Peter Egger
  • Maximilian Von Ehrlich
  • Douglas R. Nelson

Abstract

Theoretical and empirical research in economics suggests that bilateral migration triggers bilateral trade through a number of channels. This paper assesses the functional form of the impact of migration on trade flows in a quasi-experimental setting. We provide evidence that the relationship is not log-linear. In particular, at small levels of migration (stocks) the elasticity of trade to migration is quite high, and it declines to zero at about 4,000 immigrants. If migration stocks exceed such a level, the evidence suggests that trade will not increase anymore. This suggests that cross-country network and other effects flowing from migration materialize at relatively low levels of migration, but there appears to be satiation as immigrant numbers increase by much.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3467.

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Date of creation: 2011
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Handle: RePEc:ces:ceswps:_3467

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Keywords: migration; bilateral trade; quasi-randomized experiment; generalized propensity score estimation;

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References

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Citations

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Cited by:
  1. Sanne Hiller, 2013. "Does immigrant employment matter for export sales? Evidence from Denmark," Review of World Economics (Weltwirtschaftliches Archiv), Springer, Springer, vol. 149(2), pages 369-394, June.
  2. Michael Good, 2012. "How Localized is the Pro-trade Effect of Immigration? Evidence from Mexico and the United States," Working Papers, Florida International University, Department of Economics 1203, Florida International University, Department of Economics.
  3. 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).
  4. 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).
  5. Michael Good, 2013. "Geographic Proximity and the Pro-trade Effect of Migration: State-level Evidence from Mexican Migrants in the United States," 2013 Papers, Job Market Papers pgo530, Job Market Papers.
  6. Marina Murat, 2013. "Education ties and investments abroad. Empirical evidence from the US and UK," Center for Economic Research (RECent), University of Modena and Reggio E., Dept. of Economics 091, University of Modena and Reggio E., Dept. of Economics.
  7. Ernest Miguélez, 2014. "Inventor Diasporas and the Internalionalization of Technology," CReAM Discussion Paper Series 1425, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  8. Johan Fourie & Maria Santana-Gallego, 2012. "Ethnic Reunion and Cultural Affinity," Working Papers 293, Economic Research Southern Africa.
  9. Marina Murat, 2012. "Out of sight, not out of mind. Education networks and international trade," Center for Economic Research (RECent), University of Modena and Reggio E., Dept. of Economics 087, University of Modena and Reggio E., Dept. of Economics.
  10. Serrano-Domingo, Guadalupe & Requena-Silvente, Francisco, 2013. "Re-examining the migration–trade link using province data: An application of the generalized propensity score," Economic Modelling, Elsevier, Elsevier, vol. 32(C), pages 247-261.
  11. Guadalupe Serrano-Domingo & Francisco Requena-Silvente, 2013. "Examining the non-linear relationship between migration and trade," Working Papers, Department of Applied Economics II, Universidad de Valencia 1310, Department of Applied Economics II, Universidad de Valencia.

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