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Temporary Migration and Bilateral Trade Flows

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  • Marion Jansen
  • Roberta Piermartini

Abstract

Empirical evidence on migration and trade has established that permanent migration promotes trade. This finding has been interpreted as proof for the role of migrants in reducing trade-related transaction costs such as contract enforcement costs or information costs. This paper contributes to improving our understanding of trade-related transaction costs by analysing empirically whether temporary migrants, like permanent migrants, have an impact on bilateral trade flows. Temporary migrants can be expected to be less integrated in the host country than permanent migrants. At the same time, their knowledge of the home country can, on average, be expected to be more up-to-date. Our findings therefore give insights as to the relative importance of knowledge on the host and the home country for trade-related transaction costs. Using a gravity approach in our empirical analysis, we find that temporary migration has a positive and significant effect on trade and that temporary migration tends to have a stronger and more significant effect on both imports and exports than permanent migration. Interestingly, the role of temporary migrants in reducing trade costs does not appear to be associated with their skills. Copyright 2009 The Authors. Journal compilation 2009 Blackwell Publishing Ltd.

Suggested Citation

  • Marion Jansen & Roberta Piermartini, 2009. "Temporary Migration and Bilateral Trade Flows," The World Economy, Wiley Blackwell, vol. 32(5), pages 735-753, May.
  • Handle: RePEc:bla:worlde:v:32:y:2009:i:5:p:735-753
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    References listed on IDEAS

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    Cited by:

    1. Murat Genc & Masood Gheasi & Peter Nijkamp & Jacques Poot, 2012. "The impact of immigration on international trade: a meta-analysis," Chapters,in: Migration Impact Assessment, chapter 9, pages 301-337 Edward Elgar Publishing.
    2. Hatzigeorgiou, Andreas & Lodefalk, Magnus, 2016. "The Brexit Trade Disruption Revisited," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 0(Number 1), pages 1-18.
    3. Lee, Jaehwa, 2012. "Network effects on international trade," Economics Letters, Elsevier, vol. 116(2), pages 199-201.
    4. Andreas Hatzigeorgiou & Magnus Lodefalk, 2016. "Migrants’ Influence on Firm-level Exports," Journal of Industry, Competition and Trade, Springer, vol. 16(4), pages 477-497, December.
    5. Felbermayr, Gabriel & Grossmann, Volker & Kohler, Wilhelm, 2012. "Migration, International Trade and Capital Formation: Cause or Effect?," IZA Discussion Papers 6975, Institute for the Study of Labor (IZA).
    6. Peter H. Egger & Maximilian von Ehrlich & Douglas R. Nelson, 2012. "Migration and Trade," The World Economy, Wiley Blackwell, vol. 35(2), pages 216-241, February.
    7. Antonella Bellino & Giuseppe Celi, 2016. "The Role of Migration in the Variety and Quality of Trade: Evidence from Germany," German Economic Review, Verein für Socialpolitik, vol. 17(1), pages 1-25, February.
    8. Hatzigeorgiou, Andreas & Lodefalk, Magnus, 2017. "Migration and Servicification: Do Immigrant Employees Spur Firm Exports of Services?," Ratio Working Papers 298, The Ratio Institute.
    9. Giuseppe Bertola & Lorenza Mola, 2010. "Services Provision and Temporary Mobility: Freedoms and Regulation in the EU," The World Economy, Wiley Blackwell, vol. 33(4), pages 633-653, April.
    10. Hatzigeorgiou, Andreas & Lodefalk, Magnus, 2017. "Anti-Migration as a Threat to Internationalization?," Ratio Working Papers 302, The Ratio Institute.
    11. Robert E.B. Lucas, 2014. "The migration–trade link in developing economies: a summary and extension of evidence," Chapters,in: International Handbook on Migration and Economic Development, chapter 11, pages 288-326 Edward Elgar Publishing.
    12. Graneli, Anna & Lodefalk, Magnus, 2014. "Temporary Expats for Export: Firm-Level Evidence," Working Papers 2014:4, Örebro University, School of Business.
    13. Magnus Lodefalk, 2016. "Temporary expats for exports: micro-level evidence," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(4), pages 733-772, November.
    14. Faqin Lin, 2011. "The pro-trade impacts of immigrants: a meta-analysis of network effects," Journal of Chinese Economic and Foreign Trade Studies, Emerald Group Publishing, vol. 4(1), pages 17-27, February.
    15. Christopher R. Parsons & L. Alan Winters, 2014. "International migration, trade and aid: a survey," Chapters,in: International Handbook on Migration and Economic Development, chapter 4, pages 65-112 Edward Elgar Publishing.
    16. Hatzigeorgiou, Andreas & Lodefalk, Magnus, 2015. "The Role of Foreign Networks for Firm Export of Services," Working Papers 2015:6, Örebro University, School of Business.
    17. Hatzigeorgiou Andreas, 2010. "Migration as Trade Facilitation: Assessing the Links between International Trade and Migration," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-35, March.
    18. repec:hur:ijaraf:v:7:y:2017:i:3:p:6-13 is not listed on IDEAS
    19. Kadir KARAGÖZ, 2016. "Migration – trade nexus revisited: Empirical evidence from Turkish emigrants in OECD countries," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(4(609), W), pages 127-142, Winter.
    20. Piermartini, Roberta & Rousová, Linda, 2008. "Liberalization of air transport services and passenger traffic," WTO Staff Working Papers ERSD-2008-06, World Trade Organization (WTO), Economic Research and Statistics Division.
    21. Kadir KARAGÖZ, 2016. "Migration – trade nexus revisited: Empirical evidence from Turkish emigrants in OECD countries," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(4(609), W), pages 127-142, Winter.

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