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How Migrant Networks Facilitate Trade: Evidence from Swiss Exports

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  • Pierre-Louis Vézina

Abstract

This paper uses Swiss data and two novel instrumental variables to test the channels through which migrants promote trade. Using immigration in France and visa restrictions as instruments for immigrantion in Switzerland, I identify a protrade effect that takes place entirely on the extensive margin, i.e. on the number of products rather than the value of exports. This suggests networks reduce beachhead costs. I also find that migrants networks can substitute for institutions but only when products are differentiated. This suggests that differentiated products are trust-intensive or that migrants substitute for institutions by providing information rather than trust.

Suggested Citation

  • Pierre-Louis Vézina, 2012. "How Migrant Networks Facilitate Trade: Evidence from Swiss Exports," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 148(III), pages 449-476, September.
  • Handle: RePEc:ses:arsjes:2012-iii-4
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. 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.

    More about this item

    Keywords

    trade; migration; corruption;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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