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Trade and Migration to New Zealand

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  • David Law
  • John Bryant
  • Murat Genc

Abstract

This paper examines the hypothesis that a greater stock of migrants in New Zealand from a particular country leads to more trade between that country and New Zealand. The literature suggests that migrants can stimulate trade by lowering transaction costs, and by bringing with them preferences for goods produced in their home country. We use panel data techniques within the framework of a standard gravity model of trade. Our sample includes an average of over 170 countries for the years 1981 to 2001. Previous studies of trade and migration have not dealt satisfactorily with problems of unobserved heterogeneity and selection bias. We address these problems using correlated random effects and selection models. Results suggest that larger migrant stocks are associated with higher trade flows

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File URL: http://repec.org/esAUSM04/up.13936.1077851643.pdf
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Bibliographic Info

Paper provided by Econometric Society in its series Econometric Society 2004 Australasian Meetings with number 231.

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Date of creation: 11 Aug 2004
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Handle: RePEc:ecm:ausm04:231

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Keywords: Migration; Internatinoal Trade; Panel Data; New Zealand;

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  1. James E. Rauch, 1996. "Networks versus Markets in International Trade," NBER Working Papers 5617, National Bureau of Economic Research, Inc.
  2. Thierry Mayer & Pierre-Philippe Combes & Miren Lafourcade, 2004. "Can Business and Social Networks Explain the Border Effect Puzzle?," Econometric Society 2004 North American Winter Meetings, Econometric Society 330, Econometric Society.
  3. 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 302-16, May.
  4. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
  5. 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.
  6. John Bryant & David Law, 2004. "New Zealand’s Diaspora and Overseas-born Population," Treasury Working Paper Series 04/13, New Zealand Treasury.
  7. Dunlevy, James A. & Hutchinson, William K., 1999. "The Impact of Immigration on American Import Trade in the Late Nineteenth and Early Twentieth Centuries," The Journal of Economic History, Cambridge University Press, Cambridge University Press, vol. 59(04), pages 1043-1062, December.
  8. Wagner, Don & Head, Keith & Ries, John, 2002. "Immigration and the Trade of Provinces," Scottish Journal of Political Economy, Scottish Economic Society, vol. 49(5), pages 507-25, December.
  9. James E. Rauch & Vitor Trindade, 2002. "Ethnic Chinese Networks In International Trade," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 116-130, February.
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