Trade and Migration: Firm-Level Evidence
AbstractMigration has been associated with higher levels of trade. Previous studies interpret this as evidence of migrants’ ability to lower trade costs. Nevertheless, no study has investigated the impact of migrants on firms’ foreign trade. Thus, they fail to both provide evidence on the role that migrants may play in lowering firms’ trade costs, and exactly through which mechanisms the impact is derived. This study, being the first to study in depth the impact of immigration on trade at the firm level, bridges this gap in research. It utilizes new and unique employer-employee data for 12,000 Swedish firms, for the period 1998-2007, in a firm-level gravity framework. It provides novel firm-level evidence, demonstrating a significant, positive, and robust impact of immigrants in raising firms’ foreign trade. Migrants are found to increase trade both on the extensive and intensive product margin. Further, the study is able to conclude that the sustained effect mainly derives from lower information frictions through superior knowledge of foreign-markets, although contacts are also important.
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Bibliographic InfoPaper provided by Lund University, Department of Economics in its series Working Papers with number 2011:39.
Length: 86 pages
Date of creation: 13 Dec 2011
Date of revision:
Contact details of provider:
Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund,Sweden
Phone: +46 +46 222 0000
Fax: +46 +46 2224613
Web page: http://www.nek.lu.se/en
More information through EDIRC
trade costs; information; trust; migration; heterogeneous firms; gravity; firmlevel data; product margins;
Other versions of this item:
- Hatzigeorgiou, Andreas & Lodefalk, Magnus, 2011. "Trade and Migration: Firm-Level Evidence (LONG VERSION)," Working Papers 2011:6, Örebro University, School of Business.
- D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- F22 - International Economics - - International Factor Movements and International Business - - - International Migration
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-12-19 (All new papers)
- NEP-INT-2011-12-19 (International Trade)
- NEP-MIG-2011-12-19 (Economics of Human Migration)
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