Immigrant Networks and the U.S. Bilateral Trade: the Role of Immigrant Income
AbstractThis paper examines the role of immigrant networks on trade, particulalry through the demand effect. First, we examine the effect of immigration on trade when the immigrants consume more of the goods that are abundant in their home country than the natives in a standard Heckscher-Ohlin model and find that the effect of immigration on trade is a priori indeterminate. Our econometric gravity model consists of 63 major trading and immigrant sending countries for the U.S. over 1991 - 2000. We find that the immigrants income, mostly through demand effect, has a significant negative effect on the U.S. imports. However, if we include the effect of the immigrant income interacted with the size of the immigrant network, measured by the immigrant stock, we find that higher the immigrant income lower is the immigrant network effect for both U.S. exports and imports. This we find in addition to the immigrant stock elasticity of 0.27% for U.S. exports and 0.48% for U.S. imports. Capturing the immigrant assimilation with the level of immigrant income this paper finds that the immigrant network effect on trade flows is weakened by the increasing level of immigrant assimilation.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Department of Economics, Rutgers University, Newark in its series Working Papers Rutgers University, Newark with number 2010-006.
Date of creation: Dec 2010
Date of revision:
immigrant networks; immigrant assimilation; demand effect; trade.;
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.:
- Paul W. Miller & Barry R. Chiswick, 2002.
"Immigrant earnings: Language skills, linguistic concentrations and the business cycle,"
Journal of Population Economics,
Springer, vol. 15(1), pages 31-57.
- Barry R. Chiswick & Paul W. Miller, 1999. "Immigrant Earnings: Language Skills, Linguistic Concentrations and the Business Cycle," University of Chicago - George G. Stigler Center for Study of Economy and State 152, Chicago - Center for Study of Economy and State.
- Chiswick, Barry R & Miller, Paul M, 1996. "Ethnic Networks and Language Proficiency among Immigrants," Journal of Population Economics, Springer, vol. 9(1), pages 19-35, February.
- Campbell, Douglas L., 2010.
"History, culture, and trade: a dynamic gravity approach,"
24014, University Library of Munich, Germany.
- Douglas L. Campbell, 2010. "History, Culture, and Trade: A Dynamic Gravity Approach," EERI Research Paper Series EERI_RP_2010_26, Economics and Econometrics Research Institute (EERI), Brussels.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jason Barr).
If references are entirely missing, you can add them using this form.