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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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    Citations

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    Cited by:

    1. Hatzigeorgiou, Andreas & Lodefalk, Magnus, 2018. "Anti-Migration as a Threat to Internationalization? A Review of the Migration-Internationalization Literature," GLO Discussion Paper Series 287, Global Labor Organization (GLO).
    2. Hartwell, Christopher A., 2018. "The “Hierarchy of Institutions” reconsidered: Monetary policy and its effect on the rule of law in interwar Poland," Explorations in Economic History, Elsevier, vol. 68(C), pages 37-70.
    3. 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.
    4. Hatzigeorgiou, Andreas & Lodefalk, Magnus, 2017. "Anti-Migration as a Threat to Internationalization?," Ratio Working Papers 302, The Ratio Institute.
    5. Hatzigeorgiou, Andreas & Lodefalk, Magnus, 2018. "Do Migrants Facilitate Internationalization? A Review of the Literature," Working Papers 2018:11, Örebro University, School of Business, revised 19 Dec 2019.
    6. 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.
    7. Christopher R. Parsons & L. Alan Winters, 2014. "International migration, trade and aid: a survey," Chapters, in: Robert E.B. Lucas (ed.), International Handbook on Migration and Economic Development, chapter 4, pages 65-112, Edward Elgar Publishing.

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    More about this item

    Keywords

    trade; migration; corruption;
    All these keywords.

    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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