IDEAS home Printed from https://ideas.repec.org/p/dls/wpaper/0283.html
   My bibliography  Save this paper

Exports “brother-boost”: the trade-creation and skill-upgrading effect of Venezuelan forced migration on Colombian manufacturing firms

Author

Listed:
  • Carlo Lombardo

    (CEDLAS-IIE-FCE-UNLP)

  • Leonardo Peñaloza-Pacheco

    (CEDLAS-IIE-FCE-UNLP and Cornell University)

Abstract

This paper studies the impact of a massive skilled labor supply shock on Colombian manufacturing firms’ exports, the Venezuelan exodus. We exploit crosssectional and time variability of Venezuelan forced migrants’ settlements in Colombian sub-national areas through an enclave instrumental variables approach to account for the selection of immigrants’ location. Using yearly customs data from 2013 to 2019, we find that the Venezuelan migration improved Colombian manufacturing firms’ export performance, particularly to high-income countries of the OECD located in North America and low-income countries. This effect was stronger for firms that exported less prior to the exodus (2012). Furthermore, using a detailed yearly panel of manufacturing firms from 2013 to 2019 we identify the potential labor market driving mechanism of the trade-creation effect: immigrants lowered exporting firms’ blue-collar wages, and allowed them to upgrade their labor force skill composition, namely firms were able to hire workers more compatible with exports to developed destinations.

Suggested Citation

  • Carlo Lombardo & Leonardo Peñaloza-Pacheco, 2021. "Exports “brother-boost”: the trade-creation and skill-upgrading effect of Venezuelan forced migration on Colombian manufacturing firms," CEDLAS, Working Papers 0283, CEDLAS, Universidad Nacional de La Plata.
    • Handle: RePEc:dls:wpaper:0283
    as

    Download full text from publisher

    File URL: http://www.cedlas.econo.unlp.edu.ar/wp/wp-content/uploads/doc_cedlas283.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Martin, Julien, 2012. "Markups, quality, and transport costs," European Economic Review, Elsevier, vol. 56(4), pages 777-791.
    2. Mario Macis & Fabiano Schivardi, 2016. "Exports and Wages: Rent Sharing, Workforce Composition, or Returns to Skills?," Journal of Labor Economics, University of Chicago Press, vol. 34(4), pages 945-978.
    3. Irene Brambilla & Daniel Lederman & Guido Porto, 2017. "Exporters, Engineers, and Blue-collar Workers," The World Bank Economic Review, World Bank, vol. 30(Supplemen), pages 126-136.
    4. Andreas Beerli & Jan Ruffner & Michael Siegenthaler & Giovanni Peri, 2021. "The Abolition of Immigration Restrictions and the Performance of Firms and Workers: Evidence from Switzerland," American Economic Review, American Economic Association, vol. 111(3), pages 976-1012, March.
    5. Eric A. Verhoogen, 2008. "Trade, Quality Upgrading, and Wage Inequality in the Mexican Manufacturing Sector," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(2), pages 489-530.
    6. Accetturo, Antonio & Bugamelli, Matteo & Lamorgese, Andrea R., 2013. "Skill upgrading and exports," Economics Letters, Elsevier, vol. 121(3), pages 417-420.
    7. Ottaviano, Gianmarco I.P. & Peri, Giovanni & Wright, Greg C., 2018. "Immigration, trade and productivity in services: Evidence from U.K. firms," Journal of International Economics, Elsevier, vol. 112(C), pages 88-108.
    8. Card, David, 2001. "Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 22-64, January.
    9. Kalina Manova & Zhiwei Zhang, 2012. "Export Prices Across Firms and Destinations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 127(1), pages 379-436.
    10. Giovanni Peri & Chad Sparber, 2016. "Task Specialization, Immigration, and Wages," World Scientific Book Chapters, in: The Economics of International Migration, chapter 3, pages 81-115, World Scientific Publishing Co. Pte. Ltd..
    11. Irene Brambilla & Daniel Lederman & Guido Porto, 2012. "Exports, Export Destinations, and Skills," American Economic Review, American Economic Association, vol. 102(7), pages 3406-3438, December.
    12. Sari Pekkala Kerr & William R. Kerr & William F. Lincoln, 2015. "Firms and the Economics of Skilled Immigration," Innovation Policy and the Economy, University of Chicago Press, vol. 15(1), pages 115-152.
    13. Sari Pekkala Kerr & William R. Kerr & William F. Lincoln, 2015. "Skilled Immigration and the Employment Structures of US Firms," Journal of Labor Economics, University of Chicago Press, vol. 33(S1), pages 147-186.
    14. Giovanni Peri & Chad Sparber, 2016. "Task Specialization, Immigration, and Wages," World Scientific Book Chapters,in: The Economics of International Migration, chapter 3, pages 81-115 World Scientific Publishing Co. Pte. Ltd..
    15. Sylvain Weber & Martin Péclat, 2017. "A simple command to calculate travel distance and travel time," Stata Journal, StataCorp LP, vol. 17(4), pages 962-971, December.
    16. Rozo, Sandra V. & Vargas, Juan F., 2021. "Brothers or invaders? How crisis-driven migrants shape voting behavior," Journal of Development Economics, Elsevier, vol. 150(C).
    17. Giovanni Peri & Francisco Requena‐Silvente, 2010. "The trade creation effect of immigrants: evidence from the remarkable case of Spain," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 43(4), pages 1433-1459, November.
    18. Leonardo Peñaloza Pacheco, 2019. "Living with the Neighbors: The Effect of Venezuelan Forced Migration on Wages in Colombia," CEDLAS, Working Papers 0248, CEDLAS, Universidad Nacional de La Plata.
    19. Holger Görg & László Halpern & Balázs Muraközy, 2017. "Why do within-firm–product export prices differ across markets? Evidence from Hungary," The World Economy, Wiley Blackwell, vol. 40(6), pages 1233-1246, June.
    20. Morales, Juan S., 2018. "The impact of internal displacement on destination communities: Evidence from the Colombian conflict," Journal of Development Economics, Elsevier, vol. 131(C), pages 132-150.
    21. Christian Dustmann & Albrecht Glitz, 2015. "How Do Industries and Firms Respond to Changes in Local Labor Supply?," Journal of Labor Economics, University of Chicago Press, vol. 33(3), pages 711-750.
    22. Paula Bustos, 2011. "Trade Liberalization, Exports, and Technology Upgrading: Evidence on the Impact of MERCOSUR on Argentinian Firms," American Economic Review, American Economic Association, vol. 101(1), pages 304-340, February.
    23. Brambilla, Irene & Porto, Guido G., 2016. "High-income export destinations, quality and wages," Journal of International Economics, Elsevier, vol. 98(C), pages 21-35.
    24. Bahar, Dany & Ibáñez, Ana María & Rozo, Sandra V., 2021. "Give me your tired and your poor: Impact of a large-scale amnesty program for undocumented refugees," Journal of Development Economics, Elsevier, vol. 151(C).
    25. Del Carpio,Ximena Vanessa & Wagner,Mathis Christoph, 2015. "The impact of Syrian refugees on the Turkish labor market," Policy Research Working Paper Series 7402, The World Bank.
    26. Sanne Hiller, 2013. "Does immigrant employment matter for export sales? Evidence from Denmark," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 149(2), pages 369-394, June.
    27. Bastos, Paulo & Silva, Joana, 2010. "The quality of a firm's exports: Where you export to matters," Journal of International Economics, Elsevier, vol. 82(2), pages 99-111, November.
    28. Altındağ, Onur & Bakış, Ozan & Rozo, Sandra V., 2020. "Blessing or burden? Impacts of refugees on businesses and the informal economy," Journal of Development Economics, Elsevier, vol. 146(C).
    29. Juan Carlos Hallak & Peter K. Schott, 2011. "Estimating Cross-Country Differences in Product Quality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(1), pages 417-474.
    30. Gould, David M, 1994. "Immigrant Links to the Home Country: Empirical Implications for U.S. Bilateral Trade Flows," The Review of Economics and Statistics, MIT Press, vol. 76(2), pages 302-316, May.
    31. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Carlo Lombardo & Julián Martinez-Correa & Leonardo Peñaloza-Pacheco & Leonardo Gasparini, 2022. "The distributional effect of a migratory exodus in a developing country: the role of downgrading and regularization," Asociación Argentina de Economía Política: Working Papers 4573, Asociación Argentina de Economía Política.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Akgündüz, Yusuf Emre & Bağır, Yusuf Kenan & Cılasun, Seyit Mümin & Kırdar, Murat Güray, 2023. "Consequences of a massive refugee influx on firm performance and market structure," Journal of Development Economics, Elsevier, vol. 162(C).
    2. Agostina Brinatti & Nicolas Morales, 2021. "Firm Heterogeneity and the Impact of Immigration: Evidence from German Establishments," Working Paper 21-16, Federal Reserve Bank of Richmond.
    3. Léa Marchal & Clément Nedoncelle, 2019. "Immigrants, occupations and firm export performance," Review of International Economics, Wiley Blackwell, vol. 27(5), pages 1480-1509, November.
    4. William W. Olney & Dario Pozzoli, 2021. "The Impact of Immigration on Firm-Level Offshoring," The Review of Economics and Statistics, MIT Press, vol. 103(1), pages 177-195, March.
    5. Carlo Lombardo & Julian Martinez-Correa & Leonardo Peñaloza-Pacheco & Leonardo Gasparini, 2020. "The distributional effect of a massive exodus in Latin America and the role of downgrading and regularization," CEDLAS, Working Papers 0290, CEDLAS, Universidad Nacional de La Plata.
    6. Brunello, Giorgio & Lodigiani, Elisabetta & Rocco, Lorenzo, 2020. "Does low-skilled immigration increase profits? Evidence from Italian local labour markets," Regional Science and Urban Economics, Elsevier, vol. 85(C).
    7. Irene Brambilla & Andrés Cesar & Guillermo Falcone & Guido Porto, 2022. "Organizational Hierarchies and Export Destinations," CEDLAS, Working Papers 0297, CEDLAS, Universidad Nacional de La Plata.
    8. Irene Iodice & Chiara Tomasi, 2015. "Skill upgrading, wage gap and international trade: firm-level evidence for Italian manufacturing firms," LEM Papers Series 2015/06, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    9. Irene Brambilla & Nicolas Depetris Chauvin & Guido Porto, 2015. "Wage and Employment Gains from Exports: Evidence from Developing Countries," Working Papers 2015-28, CEPII research center.
    10. Christopher Hansman & Jonas Hjort & Gianmarco León-Ciliotta & Matthieu Teachout, 2020. "Vertical Integration, Supplier Behavior, and Quality Upgrading among Exporters," Journal of Political Economy, University of Chicago Press, vol. 128(9), pages 3570-3625.
    11. Dicarlo, Emanuele, 2022. "How Do Firms Adjust to Negative Labor Supply Shocks? Evidence from Migration Outflows," IZA Discussion Papers 14994, Institute of Labor Economics (IZA).
    12. Ottaviano, Gianmarco I.P. & Peri, Giovanni & Wright, Greg C., 2018. "Immigration, trade and productivity in services: Evidence from U.K. firms," Journal of International Economics, Elsevier, vol. 112(C), pages 88-108.
    13. Sofia Anyfantaki & Sarantis Kalyvitis & Margarita Katsimi & Eirini Thomaidou, 2018. "Export pricing at the firm level with panel data," Working Papers 241, Bank of Greece.
    14. Martin, Julien & Mayneris, Florian, 2015. "High-end variety exporters defying gravity: Micro facts and aggregate implications," Journal of International Economics, Elsevier, vol. 96(1), pages 55-71.
    15. Julian Pedrazzi & Leonardo Peñaloza-Pacheco, 2021. "Heterogeneous Effects of Forced Migration on Female Labor Supply," CEDLAS, Working Papers 0274, CEDLAS, Universidad Nacional de La Plata.
    16. Adriana Peluffo, 2021. "The Impact of Export Destination on Skills in a Middle-Income Country," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 13(3), pages 317-340, September.
    17. Feicheng Wang & Chris Milner & Juliane Scheffel, 2022. "Export destination and the skill premium: Evidence from Chinese manufacturing industries," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 55(2), pages 1057-1094, May.
    18. Ariu, Andrea, 2022. "Foreign workers, product quality, and trade: Evidence from a natural experiment," Journal of International Economics, Elsevier, vol. 139(C).
    19. Peluffo Adriana & Scasso Juan, 2023. "The Role of Trade Partners on Product Quality: The case of Uruguay," Asociación Argentina de Economía Política: Working Papers 4681, Asociación Argentina de Economía Política.
    20. Khan, Bilal M. & Xia, Junjie, 2016. "Export Destination, Skill Utilization and Skill Premium in Chinese Manufacturing sector," MPRA Paper 72408, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:dls:wpaper:0283. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ana Pacheco (email available below). General contact details of provider: https://edirc.repec.org/data/funlpar.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.