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On the pro-trade effects of immigrants

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  • Massimiliano Bratti
  • Luca De Benedictis
  • Gianluca Santoni

Abstract

In this paper we investigate the causal effect of immigration on trade ows using Italian panel data at the province level. We exploit the exceptional characteristics of the Italian data (the fine geographical disaggregation, the very high number of countries of origin of immigrants, the high heterogeneity of social and economic characteristics of Italian provinces, and the absence of cultural or historical ties) and an empirical strategy based on the comparison of estimates at the NUTS-2 and NUTS-3 geographical level, on the use of a wide set of fixed effects, and on instrument based on immigrants' enclaves. The results are that immigrants have a significant positive effect on both exports and imports, much larger for the latter. The pro-trade effects of immigrants tend to decline in space, and even turn negative when large ethnic communities are located too far away from a specific province (via a trade-diversion effect). Finally, we give evidence of a substantial heterogeneity in the effects of immigrants: the impact on trade tends to be larger for immigrants coming from low-income countries, for earlier waves of immigrants and for the less advanced provinces of Southern Italy.

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Bibliographic Info

Paper provided by ULB -- Universite Libre de Bruxelles in its series Working Papers CEB with number 13-014.

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Length: 44 p.
Date of creation: 20 Feb 2013
Date of revision:
Publication status: Published by:
Handle: RePEc:sol:wpaper:2013/141126

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Keywords: Immigration; Trade; Gravity model; Super-diversity; MAUP; Transplanted-home bias effect; Business and social networks effects;

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Cited by:
  1. Behncke, Nadine, 2014. "The structure of ethnic networks and exports: Evidence from Germany," Center for European, Governance and Economic Development Research Discussion Papers 198, University of Goettingen, Department of Economics.
  2. Guadalupe Serrano-Domingo & Francisco Requena-Silvente, 2013. "Examining the non-linear relationship between migration and trade," Working Papers 1310, Department of Applied Economics II, Universidad de Valencia.
  3. Gabriele Morettini & Andrea F. Presbitero & Massimo Tamberi, 2012. "Determinants of international migrations to Italian provinces," Economics Bulletin, AccessEcon, vol. 32(2), pages 1604-1617.
  4. Genc, Murat & Gheasi, Masood & Nijkamp, Peter & Poot, Jacques, 2011. "The Impact of Immigration on International Trade: A Meta-Analysis," IZA Discussion Papers 6145, Institute for the Study of Labor (IZA).
  5. Felbermayr, Gabriel & Grossmann, Volker & Kohler, Wilhelm, 2012. "Migration, International Trade and Capital Formation: Cause or Effect ?," FSES Working Papers 436, Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland.
  6. Mauro Lanati, 2014. "The sectoral pro-trade effects of ethnic networks within a Ricardian model of trade," Discussion Papers 2014/179, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
  7. Francisco Requena & Vicente Pallardó & Andrés Artal, 2012. "Which immigrants stimulate exports in their host country? (en homenaje a José Vicente Blanes)," Working Papers 1207, Department of Applied Economics II, Universidad de Valencia.
  8. Rodolfo Metulini & Paolo Sgrignoli & Stefano Schiavo & Massimo Riccaboni, 2014. "The migration network effect on international trade," Working Papers 5/2014, IMT Institute for Advanced Studies Lucca, revised May 2014.
  9. Bratti, Massimiliano & Conti, Chiara, 2014. "The Effect of (Mostly Unskilled) Immigration on the Innovation of Italian Regions," IZA Discussion Papers 7922, Institute for the Study of Labor (IZA).
  10. Selim Çagatay & Murat Genç & Onur Koska, 2013. "The Impact of Immigration on International Trade in Europe: The Case of the EU-Mediterranean-Eastern Europe Zone," ERSA conference papers ersa13p376, European Regional Science Association.

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