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The migration network effect on international trade

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Author Info

  • Rodolfo Metulini

    ()
    (IMT Lucca Institute for Advanced Studies)

  • Paolo Sgrignoli

    ()
    (IMT Lucca Institute for Advanced Studies)

  • Stefano Schiavo

    (Department of Economics and Management, University of Trento)

  • Massimo Riccaboni

    ()
    (IMT Lucca Institute for Advanced Studies)

Abstract

This paper studies the relationship between migration and trade, with the aim of measuring both direct and indirect network effects. We analyze trade of diferentiated and homogeneous goods using an econometric approach inspired by spatial econometrics, proposing a new way to define country neighbors based on the most intense links in the migration network. We find that migration significantly affects trade across categories both in direct and in indirect way. The indirect impact highlights a stronger competitive effect of third country migrants for homogeneous goods. We also confirm that the effect of migration channels is higher on differentiated goods.

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File URL: http://eprints.imtlucca.it/2193/1/EIC_WP_5_2014.pdf
File Function: First version, 2014
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Bibliographic Info

Paper provided by IMT Institute for Advanced Studies Lucca in its series Working Papers with number 5/2014.

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Length: 20 pages
Date of creation: May 2014
Date of revision: May 2014
Handle: RePEc:ial:wpaper:5/2014

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Related research

Keywords: Trade; Migration; Gravity model; Spatial econometrics; Networks;

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References

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  1. 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.
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  16. Mariya Aleksynska & Giovanni Peri, 2011. "Isolating the Network Effect of Immigrants on Trade," Working Papers 2011-26, CEPII research center.
  17. Luc Anselin & Daniel Arribas-Bel, 2013. "Spatial fixed effects and spatial dependence in a single cross-section," Papers in Regional Science, Wiley Blackwell, vol. 92(1), pages 3-17, 03.
  18. Massimiliano Bratti & Luca de Benedictis & Gianluca Santoni, 2012. "On the Pro-Trade Effects of Immigrants," Development Working Papers 347, Centro Studi Luca d\'Agliano, University of Milano, revised 13 Nov 2012.
  19. Elhorst, J. Paul & Lacombe, Donald J. & Piras, Gianfranco, 2012. "On model specification and parameter space definitions in higher order spatial econometric models," Regional Science and Urban Economics, Elsevier, vol. 42(1-2), pages 211-220.
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