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Does Immigration Help to Explain Intra-Industry Trade? Evidence for Spain

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This paper argues and provides evidence that the stock of immigrants in a country have a positive effect on the share of its bilateral intra-industry trade (IIT). The paper links the literatures about immigration and trade and about IIT determinants. The key is that immigration contributes to trade transaction costs reduction and this would benefit more intra than inter-industry trade. We test this hypothesis using Spanish data and departing from the models developed by Helpman (1987). Immigration helps more IIT in manufactures and IIT between Spain and less developed countries. Results are robust both to different estimation methods and specifications.

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  • José Vicente Blanes Cristóbal, 2004. "Does Immigration Help to Explain Intra-Industry Trade? Evidence for Spain," Economic Working Papers at Centro de Estudios Andaluces E2004/29, Centro de Estudios Andaluces.
    • Handle: RePEc:cea:doctra:e2004_29
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    More about this item

    Keywords

    Intra-industry trade; immigration.;

    JEL classification:

    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

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