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The Pro-Trade Effect of Immigration on American Exports During the Late Nineteenth and Early Twentieth Centuries

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Author Info
Dunlevy, James A. () (Department of Economics, Miami University)
Hutchinson, William K. (Department of Economics, Vanderbilt University)

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Abstract

The belief that immigrants generate beneficial externalities in their host countries, specifically in the form of an increased opportunity and ability of firms to expand their foreign trade, has recently been challenged by George Borjas in Heaven’s Door (1999, p. 97) as having no empirical support. Borjas’ assertion ignores several recent papers that provide precisely that evidence of a powerful pro-trade effect of international migration. Here we extend that body of evidence by looking to history. We show that immigration, primarily from Europe between 1870 and 1910, had an important pro-trade effect on American exports. Our data set spans the exports of 44 commodities to 17 countries observed at 5 year intervals. We use a modified gravity model to examine the migrant stock-export relationship and find that United States exports to a country were positively related to the size of the migrant stock of immigrants from that country. The estimated strength of the effect varied across "Old" Europe, "New" Europe, and non-Europe groupings of the trading partner countries. Exports were also found to have been greater to English-speaking countries, and to countries with per capita incomes similar to the United States. This relative per capita income effect became stronger during the latter part of the period, whereas the migrant stock effect diminished after 1885.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 375.

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Length: 34 pages
Date of creation: Oct 2001
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Handle: RePEc:iza:izadps:dp375

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Related research
Keywords: Ethnic networks; information and trust bridges; gravity model; export promotion; Heckscher-Ohlin model; Linder model;

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Find related papers by JEL classification:
F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
F22 - International Economics - - International Factor Movements and International Business - - - International Migration
N71 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - U.S.; Canada: Pre-1913

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. James E. Rauch, 1991. "Reconciling the Pattern of Trade with the Pattern of Migration," NBER Working Papers 3605, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. 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, vol. 59(04), pages 1043-1062, December. [Downloadable!]
  3. Dunlevy, James A, 1980. "A Test of the Capacity Pressure Hypothesis within a Simultaneous Equations Model of Export Performance," The Review of Economics and Statistics, MIT Press, vol. 62(1), pages 131-35, February. [Downloadable!] (restricted)
  4. Bergstrand, Jeffrey H, 1989. "The Generalized Gravity Equation, Monopolistic Competition, and the Factor-Proportions Theory in International Trade," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 143-53, February. [Downloadable!] (restricted)
  5. Bergstrand, Jeffrey H, 1990. "The Heckscher-Ohlin-Samuelson Model, the Linder Hypothesis and the Determinants of Bilateral Intra-industry Trade," Economic Journal, Royal Economic Society, vol. 100(403), pages 1216-29, December. [Downloadable!] (restricted)
  6. 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. [Downloadable!] (restricted)
  7. Bergstrand, Jeffrey H, 1985. "The Gravity Equation in International Trade: Some Microeconomic Foundations and Empirical Evidence," The Review of Economics and Statistics, MIT Press, vol. 67(3), pages 474-81, August. [Downloadable!] (restricted)
  8. James E. Rauch, 1996. "Trade and Search: Social Capital, Sogo Shosha, and Spillovers," NBER Working Papers 5618, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  9. Irwin, Douglas A, 1996. "The United States in a New Global Economy? A Century's Perspective," American Economic Review, American Economic Association, vol. 86(2), pages 41-46, May. [Downloadable!] (restricted)
  10. Haveman, J. & Hummels, D., 1997. "What Can We Learn from Bilateral Trade? Gravity and Beyond," Papers 97-002, Purdue University, Krannert School of Management - Center for International Business Education and Research (CIBER).
  11. 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.
  12. Dunlevy, James A. & Saba, Richard P., 1992. "The role of nationality-specific characteristics on the settlement patterns of late nineteenth century immigrants," Explorations in Economic History, Elsevier, vol. 29(2), pages 228-249, April. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. William K. Hutchinson, 2001. ""Linguistic Distance" as a Determinant of Bilateral Trade," Working Papers 0130, Department of Economics, Vanderbilt University, revised Oct 2003. [Downloadable!]
  2. Alexander Hijzen & Peter Wright, 2005. "Migration, Trade and Wages," Working Papers 2005-06, CEPII research center. [Downloadable!]
  3. Jörn Kleinert, 2000. "Growing Trade in Intermediate Goods: Outsourcing, Global Sourcing or Increasing Importance of MNE Networks?," Kiel Working Papers 1006, Kiel Institute for the World Economy. [Downloadable!]
    Other versions:
  4. Subhayu Bandyopadhyay & Cletus C. Coughlin & Howard J. Wall, 2006. "Ethnic Networks and U.S. Exports," IZA Discussion Papers 1998, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  5. William K. Hutchinson & James A. Dunlevy, 2001. "The Pro-Trade Effect of Immigration on American Exports During Period 1870 to 1910," Working Papers 0125, Department of Economics, Vanderbilt University. [Downloadable!]
  6. Jansen, Marion & Piermartini, Roberta, 2005. "The Impact of Mode 4 Liberalization on Bilateral Trade Flows," CEPR Discussion Papers 5382, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  7. Jacques Poot & Anna Strutt, 2009. "International Trade Agreements and International Migration," Working Papers in Economics 09/06, University of Waikato, Department of Economics. [Downloadable!]
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