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Bilateral trade impacts of temporary foreign visitor policy

Author

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  • Mahmut Yasar
  • David Lisner
  • Roderick Rejesus

Abstract

Using country-level panel data from 1950 to 2003, this paper critically examines the impact of the US Visa Waiver Program (VWP) on bilateral trade levels. Our empirical analysis uses a variety of specifications, estimators, and robustness checks, including a “random growth” specification that controls for selection bias from both time-varying and time-invariant unobserved country-specific characteristics. The results indicate that a temporary foreign visitor policy with less requirements, such as the US VWP, tends to increase the bilateral trade levels between the US and the selected VWP countries, especially for US exports. This suggests that VWP may have encouraged business travel and commerce enough such that there are export benefits from this less restrictive temporary foreign visitor policy of about 10–20% (~2–4% in tariff equivalent terms). Copyright Kiel Institute 2012

Suggested Citation

  • Mahmut Yasar & David Lisner & Roderick Rejesus, 2012. "Bilateral trade impacts of temporary foreign visitor policy," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(3), pages 501-521, September.
  • Handle: RePEc:spr:weltar:v:148:y:2012:i:3:p:501-521
    DOI: 10.1007/s10290-012-0122-5
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    Cited by:

    1. Graneli, Anna & Lodefalk, Magnus, 2014. "Temporary Expats for Export: Firm-Level Evidence," Working Papers 2014:4, Örebro University, School of Business.
    2. Norasingh, Xaysomphet & Machikita, Tomohiro & Ueki, Yasushi, 2015. "South-South technology transfer to Laos through face-to-face contacts," Journal of Business Research, Elsevier, vol. 68(7), pages 1420-1425.
    3. 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.
    4. Ayumu Tanaka, 2013. "Geographic Concentration of Foreign Visitors to Japan," Discussion papers e-12-013, Graduate School of Economics Project Center, Kyoto University.

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    More about this item

    Keywords

    Bilateral trade; Cross-country labor movements; Face-to-face business interactions; International business; Temporary business travelers; Panel data; Random growth specification; Fixed effects; Poisson; Generalized method of moments; C23; F19; F22;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F19 - International Economics - - Trade - - - Other
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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