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The trade creation effect of immigrants: evidence from the remarkable case of Spain

Listed author(s):
  • Giovanni Peri
  • Francisco Requena-Silvente

This paper investigates the immigration-trade link using data on individual exporting transactions and immigrants in Spanish provinces between 1995 and 2008. We quantify the impact of new immigrants on the extensive margin (number of transactions) and intensive margin (average value per transaction) of exports. We find that immigrants significantly increase exports and that the effect is almost entirely due to an increase in the extensive margin. Consistent with the idea that immigrants reduce the fixed cost of exporting, we find stronger effects for differentiated goods and for countries that are culturally distant from Spain.

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Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 43 (2010)
Issue (Month): 4 (November)
Pages: 1433-1459

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Handle: RePEc:cje:issued:v:43:y:2010:i:4:p:1433-1459
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  1. Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, 2007. "Firms in International Trade," NBER Working Papers 13054, National Bureau of Economic Research, Inc.
  2. José V. Blanes & Joan A. Martín-Montaner, 2006. "Migration Flows and Intra-Industry Trade Adjustments," Working Papers 06.04, Universidad Pablo de Olavide, Department of Economics.
  3. James A. Dunlevy, 2006. "The Influence of Corruption and Language on the Protrade Effect of Immigrants: Evidence from the American States," The Review of Economics and Statistics, MIT Press, vol. 88(1), pages 182-186, February.
  4. Subhayu Bandyopadhyay & Cletus C. Coughlin & Howard J. Wall, 2005. "Ethnic Networks and U.S. Exports," Working Papers 05-15 Classification- JEL, Department of Economics, West Virginia University.
  5. David Card, 1997. "Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration," NBER Working Papers 5927, National Bureau of Economic Research, Inc.
  6. David E. Weinstein & Christian Broda, 2004. "Globalization And The Gains From Variety," Econometric Society 2004 Latin American Meetings 327, Econometric Society.
  7. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
  8. James E. Rauch, 1996. "Networks versus Markets in International Trade," NBER Working Papers 5617, National Bureau of Economic Research, Inc.
  9. Briant, Anthony & Combes, Pierre-Philippe & Lafourcade, Miren, 2009. "Product Complexity, Quality of Institutions and the Pro-Trade Effect of Immigrants," CEPR Discussion Papers 7192, C.E.P.R. Discussion Papers.
  10. José V. Blanes, 2005. "Does Immigration Help to Explain Intra-Industry Trade? Evidence for Spain," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 141(2), pages 244-270, July.
  11. Pierre-Philippe Combes & Miren Lafourcade & Thierry Mayer, 2005. "The Trade Creating Effects of Business and Social Networks: Evidence from France," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00268768, HAL.
  12. David Card, 2009. "Immigration and Inequality," NBER Working Papers 14683, National Bureau of Economic Research, Inc.
  13. David Law & John Bryant & Murat Genc, 2004. "Trade and Migration to New Zealand," Econometric Society 2004 Australasian Meetings 231, Econometric Society.
  14. 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.
  15. Joao Santos Silva & Silvana Tenreyro, 2005. "The Log of Gravity," CEP Discussion Papers dp0701, Centre for Economic Performance, LSE.
  16. Gianmarco I.P. Ottaviano & Giovanni Peri, 2006. "The economic value of cultural diversity: evidence from US cities," Journal of Economic Geography, Oxford University Press, vol. 6(1), pages 9-44, January.
  17. Catherine Co & Patricia Euzent & Thomas Martin, 2004. "The export effect of immigration into the USA," Applied Economics, Taylor & Francis Journals, vol. 36(6), pages 573-583.
  18. Wagner, Don & Head, Keith & Ries, John, 2002. "Immigration and the Trade of Provinces," Scottish Journal of Political Economy, Scottish Economic Society, vol. 49(5), pages 507-525, December.
  19. Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2006. "Trading Partners and Trading Volumes," DEGIT Conference Papers c011_022, DEGIT, Dynamics, Economic Growth, and International Trade.
  20. Daniel L. Millimet & Thomas Osang, 2007. "Do state borders matter for U.S. intranational trade? The role of history and internal migration," Canadian Journal of Economics, Canadian Economics Association, vol. 40(1), pages 93-126, February.
  21. 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.
  22. Mark G. Herander & Luz A. Saavedra, 2005. "Exports and the Structure of Immigrant-Based Networks: The Role of Geographic Proximity," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 323-335, May.
  23. 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.
  24. 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.
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