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Immigrant’s Characteristics and their different effects on bilateral trade. Evidence from Spain

Author

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  • José V. Blanes

    (Department of Economics, Universidad Pablo de Olavide)

Abstract

This paper tests for the impact of immigration on bilateral trade using Spanish data from 1995 to 2003. It also explores some possible mechanisms behind this link. It uses a gravity equation for trade augmented with an immigrants stock variable and a set of control variables. The immigrants variable enters the estimated equation in different ways depending on immigrant relevant characteristics both individual and non individual-specific. Results show that there is a positive link between immigration and both exports and imports. We find evidence for the trade transaction cost channel but not for the preference one. The mechanisms behind this link are the information effect – immigrant’s additional information about product and about social and political institutions - and the social o ethnic network effect - immigrants with a medium level of education and those related to business activities are the one who have a positive effect on bilateral trade.

Suggested Citation

  • José V. Blanes, 2006. "Immigrant’s Characteristics and their different effects on bilateral trade. Evidence from Spain," Working Papers 06.08, Universidad Pablo de Olavide, Department of Economics.
    • Handle: RePEc:pab:wpaper:06.08
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    File URL: http://www.upo.es/serv/bib/wps/econ0608.pdf
    File Function: First version, 2006
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    References listed on IDEAS

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    1. Sourafel Girma & Zhihao Yu, 2002. "The link between immigration and trade: Evidence from the United Kingdom," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 138(1), pages 115-130, March.
    2. 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 302-316, May.
    3. 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.
    4. Rauch, James E., 1999. "Networks versus markets in international trade," Journal of International Economics, Elsevier, vol. 48(1), pages 7-35, June.
    5. 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(4), pages 1043-1062, December.
    6. James E. Rauch, 2001. "Business and Social Networks in International Trade," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1177-1203, December.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Flisi, Sara & Murat, Marina, 2011. "The hub continent. Immigrant networks, emigrant diasporas and FDI," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(6), pages 796-805.
    2. Tadesse, Bedassa & White, Roger, 2008. "Do immigrants counter the effect of cultural distance on trade? Evidence from US state-level exports," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(6), pages 2304-2318, December.
    3. Murat Genc & Masood Gheasi & Peter Nijkamp & Jacques Poot, 2012. "The impact of immigration on international trade: a meta-analysis," Chapters, in: Peter Nijkamp & Jacques Poot & Mediha Sahin (ed.), Migration Impact Assessment, chapter 9, pages 301-337, Edward Elgar Publishing.
    4. Sara Flisi & Marina Murat, 2009. "Immigrant Links, Diasporas and FDI. An Empirical Investigation on Five European Countries," Department of Economics 0608, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
    5. Horácio Faustino & Isabel Proença, 2011. "Effects of Immigration on Intra-Industry Trade: A logit analysis," Working Papers Department of Economics 2011/19, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    6. A. James Wynne & Chandrashekar Challa & John Palesis & Bernie Farkas, 2015. "A Conceptual Model: Impact Of Usage Of Social Media Tools To Enhance Project Management Success," Portuguese Journal of Management Studies, ISEG, Universidade de Lisboa, vol. 0(2), pages 55-72.
    7. Roger White, 2010. "Migration and International Trade," Books, Edward Elgar Publishing, number 13670.
    8. Marina Murat & Barbara Pistoresi & Alberto Rinaldi, 2008. "Italian Diaspora and Foreign Direct Investment: A Cliometric Perspective," Center for Economic Research (RECent) 013, University of Modena and Reggio E., Dept. of Economics "Marco Biagi".
    9. Horácio C. Faustino & Isabel Proença, 2015. "Immigration And Intra-Industry Trade: The Relevance Of Language, Qualification And Economic Integration," Portuguese Journal of Management Studies, ISEG, Universidade de Lisboa, vol. 0(1), pages 3-18.
    10. White, Roger & Tadesse, Bedassa, 2008. "Immigrants, cultural distance and U.S. state-level exports of cultural products," The North American Journal of Economics and Finance, Elsevier, vol. 19(3), pages 331-348, December.
    11. Roger White & Bedassa Tadesse, 2011. "International Migration and Economic Integration," Books, Edward Elgar Publishing, number 14318.

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    More about this item

    Keywords

    International Trade; Migration.;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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