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Does Immigrant Employment Matter for Exports? Evidence From Denmark

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Author Info

  • Hiller, Sanne

    ()
    (Institut for Økonomi - Nationaløkonomi)

Abstract

Immigration impacts the economy in ample ways: it affects growth, wages and total factor productivity. This study deals with the effects of immigration on firm exports. Can firms benefit from hiring immigrants to expand their export sales? Or do immigrants who live in the firm’s region affect trade? In contrast to the existing literature, we are able to distinguish these two distinct channels. Using matched employer-employee data from Denmark for the years 1995 - 2005, we provide novel insight in the nexus between exports and immigration. We further contribute to the literature by providing first evidence on the adjustment of firms’ product portfolio in response to immigration. Our results show that firms can reap the benefits from immigration only through hiring foreigners. This implies that the trade-cost reducing intercultural knowledge embedded in foreign expatriates can only be accessed via employment. Thus, to tap the full potential of foreign labor movements for international trade, political efforts should be targeted towards labor market integration of immigrants.

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File URL: http://www.hha.dk/nat/wper/11-16_sanh.pdf
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Bibliographic Info

Paper provided by University of Aarhus, Aarhus School of Business, Department of Economics in its series Working Papers with number 11-16.

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Length: 25 pages
Date of creation: 01 Dec 2011
Date of revision:
Handle: RePEc:hhs:aareco:2011_016

Contact details of provider:
Postal: The Aarhus School of Business, Prismet, Silkeborgvej 2, DK 8000 Aarhus C, Denmark
Phone: +45 89 486396
Fax: +45 8615 5175
Web page: http://www.asb.dk/departments/nat.aspx
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Related research

Keywords: International Trade; Migration; Firm-level analysis; Matched Employer-Employee Data;

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References

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  1. Eaton, B Curtis & Schmitt, Nicolas, 1994. "Flexible Manufacturing and Market Structure," American Economic Review, American Economic Association, vol. 84(4), pages 875-88, September.
  2. Gabriel J Felbermayr & Sanne Hiller & Davide Sala, 2008. "Does Immigration Boost Per Capita Income?," Diskussionspapiere aus dem Institut für Volkswirtschaftslehre der Universität Hohenheim 300/2008, Department of Economics, University of Hohenheim, Germany.
  3. Eckel, Carsten & Neary, J. P., 2010. "Multi-product firms and flexible manufacturing in the global economy," Munich Reprints in Economics 20525, University of Munich, Department of Economics.
  4. David P. Myatt & Justin P. Johnson, 2002. "Multiproduct Quality Competition: Fighting Brands and Product Line Pruning," Economics Series Working Papers 105, University of Oxford, Department of Economics.
  5. Allanson, Paul & Montagna, Catia, 2005. "Multiproduct firms and market structure: An explorative application to the product life cycle," International Journal of Industrial Organization, Elsevier, vol. 23(7-8), pages 587-597, September.
  6. Costas Arkolakis & Marc-Andreas Muendler, 2010. "The Extensive Margin of Exporting Products: A Firm-level Analysis," NBER Working Papers 16641, National Bureau of Economic Research, Inc.
  7. Pinelopi Goldberg & Amit Khandelwal & Nina Pavcnik & Petia Topalova, 2009. "Imported Intermediate Inputs and Domestic Product Growth: Evidence from India," Working Papers 1179, Princeton University, Department of Economics, Center for Economic Policy Studies..
  8. Leonardo Iacovone & BeataS. Javorcik, 2010. "Multi-Product Exporters: Product Churning, Uncertainty and Export Discoveries," Economic Journal, Royal Economic Society, vol. 120(544), pages 481-499, 05.
  9. Gabriel J. FELBERMAYR & Benjamin JUNG & Farid TOUBAL, 2010. "Ethnic Networks, Information, and International Trade: Revisiting the Evidence," Annales d'Economie et de Statistique, ENSAE, issue 97-98, pages 41-70.
  10. repec:hal:wpaper:halshs-00574972 is not listed on IDEAS
  11. Felbermayr, Gabriel & Jung, Benjamin, 2009. "The pro-trade effect of the brain drain: Sorting out confounding factors," Munich Reprints in Economics 20577, University of Munich, Department of Economics.
  12. Pamina Koenig, 2009. "Immigration and the export decision to the home country," PSE Working Papers halshs-00574972, HAL.
  13. Combes, Pierre-Philippe & Lafourcade, Miren & Mayer, Thierry, 2005. "The trade-creating effects of business and social networks: evidence from France," Journal of International Economics, Elsevier, vol. 66(1), pages 1-29, May.
  14. Martyn Andrews & Thorsten Schank & Richard Upward, 2006. "Practical fixed-effects estimation methods for the three-way error-components model," Stata Journal, StataCorp LP, vol. 6(4), pages 461-481, December.
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