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The link between immigration and trade in developing countries

Author

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  • José Vicente Blanes

    (Universidad Pablo de Olavide)

Abstract

International trade can foster economic development. This paper examines the link between immigration from developing countries to OECD countries and their bilateral trade; it also explores some possible mechanism behind this link. It uses a gravity equation for trade augmented by an immigrant stock variable and a set of control variables. The immigrants´ variable enters the estimated equation in different ways depending on immigrants´ relevant characteristics both individual and non individual-specific. Results show that in developing countries there is a positive link between immigration and both exports and imports. We find evidence for the trade transaction cost channel but not for the preference one. We identify the social or ethnic network effect as the mechanism behind this link since immigrants related to business activities are the ones who have a positive effect on bilateral trade.

Suggested Citation

  • José Vicente Blanes, 2010. "The link between immigration and trade in developing countries," Working Papers 10-07, Asociación Española de Economía y Finanzas Internacionales.
  • Handle: RePEc:aee:wpaper:1007
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. The Link Between Immigration and Trade in Developing Countries
      by Ariel Goldring in Free Market Mojo on 2010-11-11 18:00:28

    Citations

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    Cited by:

    1. Murat Genc & Masood Gheasi & Peter Nijkamp & Jacques Poot, 2011. "The impact of immigration on international trade: a meta-analysis," Norface Discussion Paper Series 2011020, Norface Research Programme on Migration, Department of Economics, University College London.
    2. 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.
    3. R White, 2009. "Immigration, Trade and Product Differentiation," Economic Issues Journal Articles, Economic Issues, vol. 14(1), pages 43-64, March.

    More about this item

    Keywords

    International Trade; Migration; Economic Development.;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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