IDEAS home Printed from https://ideas.repec.org/p/cii/cepidt/2018-01.html
   My bibliography  Save this paper

Immigrant entrepreneurs, diasporas and exports

Author

Listed:
  • Massimiliano Bratti
  • Luca De Benedictis
  • Gianluca Santoni

Abstract

In this paper we highlight a new complementary channel to the business and social network effect à la Rauch (2001) through which immigrants generate increased export flows from the regions in which they settle to their countries of origin: they can become entrepreneurs. Using very small-scale (NUTS-3) administrative data on immigrants’ location in Italy, the local presence of immigrant entrepreneurs (i.e. firms owned by foreign-born entrepreneurs) in the manufacturing sector, and on trade flows in manufacturing between Italian provinces and more than 200 foreign countries, we assess the causal relationship going from diasporas and immigrant entrepreneurs towards export flows. Both the size of the diaspora and the number of immigrant entrepreneurs have a positive, significant and economically meaningful effect on exports. In particular, we find that increasing the stock of (non-entrepreneur) immigrants by 10% would lead to a 1.7% increase in exports in manufacturing, while increasing the number of immigrant entrepreneurs in manufacturing by 10% would raise exports by about 0.6%.

Suggested Citation

  • Massimiliano Bratti & Luca De Benedictis & Gianluca Santoni, 2018. "Immigrant entrepreneurs, diasporas and exports," Working Papers 2018-01, CEPII research center.
  • Handle: RePEc:cii:cepidt:2018-01
    as

    Download full text from publisher

    File URL: http://www.cepii.fr/PDF_PUB/wp/2018/wp2018-01.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Melitz, Jacques & Toubal, Farid, 2014. "Native language, spoken language, translation and trade," Journal of International Economics, Elsevier, vol. 93(2), pages 351-363.
    2. Massimiliano Bratti & Luca Benedictis & Gianluca Santoni, 2014. "On the pro-trade effects of immigrants," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 150(3), pages 557-594, August.
    3. Gianmarco I. P. Ottaviano & Giovanni Peri, 2016. "Rethinking The Effect Of Immigration On Wages," World Scientific Book Chapters,in: The Economics of International Migration, chapter 2, pages 35-80 World Scientific Publishing Co. Pte. Ltd..
    4. Binnur Balkan & Semih Tumen, 2016. "Immigration and prices: quasi-experimental evidence from Syrian refugees in Turkey," Journal of Population Economics, Springer;European Society for Population Economics, vol. 29(3), pages 657-686, July.
    5. Mariya Aleksynska & Giovanni Peri, 2014. "Isolating the Network Effect of Immigrants on Trade," The World Economy, Wiley Blackwell, vol. 37(3), pages 434-455, March.
    6. George J. Borjas, 1995. "The Economic Benefits from Immigration," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 3-22, Spring.
    7. Pierpaolo Parrotta & Dario Pozzoli & Mariola Pytlikova, 2014. "The nexus between labor diversity and firm’s innovation," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(2), pages 303-364, April.
    8. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    9. Graneli, Anna & Lodefalk, Magnus, 2014. "Temporary Expats for Export: Firm-Level Evidence," Working Papers 2014:4, Örebro University, School of Business.
    10. Christopher Parsons & Pierre‐Louis Vézina, 2018. "Migrant Networks and Trade: The Vietnamese Boat People as a Natural Experiment," Economic Journal, Royal Economic Society, vol. 128(612), pages 210-234, July.
    11. Anthony Briant & Pierre-Philippe Combes & Miren Lafourcade, 2014. "Product Complexity, Quality of Institutions and the Protrade Effect of Immigrants," The World Economy, Wiley Blackwell, vol. 37(1), pages 63-85, January.
    12. Jennifer Hunt & Marjolaine Gauthier-Loiselle, 2010. "How Much Does Immigration Boost Innovation?," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(2), pages 31-56, April.
    13. Walter Steingress, 2018. "The causal impact of migration on US trade: Evidence from political refugees," Canadian Journal of Economics, Canadian Economics Association, vol. 51(4), pages 1312-1338, November.
    14. David Card, 2009. "Immigration and Inequality," CReAM Discussion Paper Series 0907, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    15. Giovanni Peri & Francisco Requena-Silvente, 2010. "The trade creation effect of immigrants: evidence from the remarkable case of Spain," Canadian Journal of Economics, Canadian Economics Association, vol. 43(4), pages 1433-1459, November.
    16. Krishna Patel & Francis Vella, 2013. "Immigrant Networks and Their Implications for Occupational Choice and Wages," The Review of Economics and Statistics, MIT Press, vol. 95(4), pages 1249-1277, October.
    17. Michel Beine & Simone Bertoli & Jesús Fernández-Huertas Moraga, 2016. "A Practitioners’ Guide to Gravity Models of International Migration," The World Economy, Wiley Blackwell, vol. 39(4), pages 496-512, April.
    18. Joseph G. Altonji & David Card, 1991. "The Effects of Immigration on the Labor Market Outcomes of Less-skilled Natives," NBER Chapters,in: Immigration, Trade, and the Labor Market, pages 201-234 National Bureau of Economic Research, Inc.
    19. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, October.
    20. repec:wsi:wschap:9789814719902_0010 is not listed on IDEAS
    21. 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.
    22. 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.
    23. Adam M. Kleinbaum & Toby E. Stuart & Michael L. Tushman, 2013. "Discretion Within Constraint: Homophily and Structure in a Formal Organization," Organization Science, INFORMS, vol. 24(5), pages 1316-1336, October.
    24. Combes, Pierre-Philippe & Lafourcade, Miren & Mayer, Thierry, 2005. "The trade-creating effects of business and social networks: evidence from France," Journal of International Economics, Elsevier, vol. 66(1), pages 1-29, May.
    25. Sanne Hiller, 2013. "Does immigrant employment matter for export sales? Evidence from Denmark," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 149(2), pages 369-394, June.
    26. Christian Dustmann & Tommaso Frattini & Anna Rosso, 2015. "The Effect of Emigration from Poland on Polish Wages," Scandinavian Journal of Economics, Wiley Blackwell, vol. 117(2), pages 522-564, April.
    27. Gianmarco I.P. Ottaviano & Giovanni Peri, 2016. "The economic value of cultural diversity: evidence from US cities," World Scientific Book Chapters,in: The Economics of International Migration, chapter 7, pages 229-264 World Scientific Publishing Co. Pte. Ltd..
    28. Card, David, 2001. "Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 22-64, January.
    29. Gould, David M, 1994. "Immigrant Links to the Home Country: Empirical Implications for U.S. Bilateral Trade Flows," The Review of Economics and Statistics, MIT Press, vol. 76(2), pages 302-316, May.
    30. repec:spr:izamig:v:6:y:2017:i:1:d:10.1186_s40176-016-0077-8 is not listed on IDEAS
    31. Fally, Thibault, 2015. "Structural gravity and fixed effects," Journal of International Economics, Elsevier, vol. 97(1), pages 76-85.
    32. George J. Borjas, 1994. "The Economics of Immigration," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1667-1717, December.
    33. Keith Head & John Ries, 1998. "Immigration and Trade Creation: Econometric Evidence from Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 31(1), pages 47-62, February.
    34. George J. Borjas, 2015. "Immigration and Globalization: A Review Essay," Journal of Economic Literature, American Economic Association, vol. 53(4), pages 961-974, December.
    35. Jahn, Vera & Steinhardt, Max Friedrich, 2016. "Innovation and immigration — Insights from a placement policy," Economics Letters, Elsevier, vol. 146(C), pages 116-119.
    36. William W. Olney, 2013. "Immigration And Firm Expansion," Journal of Regional Science, Wiley Blackwell, vol. 53(1), pages 142-157, February.
    37. Patricia Cortes, 2008. "The Effect of Low-Skilled Immigration on U.S. Prices: Evidence from CPI Data," Journal of Political Economy, University of Chicago Press, vol. 116(3), pages 381-422, June.
    38. Chang-Tai Hsieh & Nicholas Li & Ralph Ossa & Mu-Jeung Yang, 2016. "Accounting for the New Gains from Trade Liberalization," NBER Working Papers 22069, National Bureau of Economic Research, Inc.
    39. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    40. Sascha Becker & Peter Egger, 2013. "Endogenous product versus process innovation and a firm’s propensity to export," Empirical Economics, Springer, vol. 44(1), pages 329-354, February.
    41. Bernt Bratsberg & Oddbjørn Raaum & Marianne Røed & Pål Schøne, 2014. "Immigration Wage Effects by Origin," Scandinavian Journal of Economics, Wiley Blackwell, vol. 116(2), pages 356-393, April.
    42. Rauch, James E., 1999. "Networks versus markets in international trade," Journal of International Economics, Elsevier, vol. 48(1), pages 7-35, June.
    43. repec:eee:eecrev:v:96:y:2017:i:c:p:62-82 is not listed on IDEAS
    44. Costas Arkolakis & Arnaud Costinot & Andres Rodriguez-Clare, 2012. "New Trade Models, Same Old Gains?," American Economic Review, American Economic Association, vol. 102(1), pages 94-130, February.
    45. Stefan Lachenmaier & Ludger Wößmann, 2006. "Does innovation cause exports? Evidence from exogenous innovation impulses and obstacles using German micro data," Oxford Economic Papers, Oxford University Press, vol. 58(2), pages 317-350, April.
    46. Alberto Alesina & Eliana La Ferrara, 2003. "Ethnic Diversity and Economic Performance," Harvard Institute of Economic Research Working Papers 2028, Harvard - Institute of Economic Research.
    47. Clark, Kenneth & Drinkwater, Stephen, 2000. "Pushed out or pulled in? Self-employment among ethnic minorities in England and Wales," Labour Economics, Elsevier, vol. 7(5), pages 603-628, September.
    48. Bastos, Paulo & Silva, Joana, 2012. "Networks, firms, and trade," Journal of International Economics, Elsevier, vol. 87(2), pages 352-364.
    49. Osea Giuntella, 2012. "Do immigrants squeeze natives out of bad schedules? Evidence from Italy," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 1(1), pages 1-21, December.
    50. Wooldridge, Jeffrey M., 2009. "On estimating firm-level production functions using proxy variables to control for unobservables," Economics Letters, Elsevier, vol. 104(3), pages 112-114, September.
    51. repec:nbr:nberbk:halt14-1 is not listed on IDEAS
    52. Mark G. Herander & Luz A. Saavedra, 2005. "Exports and the Structure of Immigrant-Based Networks: The Role of Geographic Proximity," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 323-335, May.
    53. Mediha Sahin & Peter Nijkamp & Soushi Suzuki, 2014. "Contrasts and similarities in economic performance of migrant entrepreneurs," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-21, December.
    54. James E. Rauch, 2001. "Business and Social Networks in International Trade," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1177-1203, December.
    55. Francesc Ortega & Giovanni Peri, 2016. "Openness and income: The roles of trade and migration," World Scientific Book Chapters,in: The Economics of International Migration, chapter 10, pages 309-329 World Scientific Publishing Co. Pte. Ltd..
    56. Mitaritonna, Cristina & Orefice, Gianluca & Peri, Giovanni, 2017. "Immigrants and firms’ outcomes: Evidence from France," European Economic Review, Elsevier, vol. 96(C), pages 62-82.
    57. Sparber, Chad, 2008. "A theory of racial diversity, segregation, and productivity," Journal of Development Economics, Elsevier, vol. 87(2), pages 210-226, October.
    58. James E. Rauch & Vitor Trindade, 2002. "Ethnic Chinese Networks In International Trade," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 116-130, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jahn, Vera & Steinhardt, Max Friedrich, 2018. "Immigration and new firm formation: Evidence from a quasi-experimental setting in Germany," Ruhr Economic Papers 787, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    2. Bastos, Paulo & Silva, Joana, 2012. "Networks, firms, and trade," Journal of International Economics, Elsevier, vol. 87(2), pages 352-364.

    More about this item

    Keywords

    Exports; immigrants; gravity; immigrant entrepreneurs; Italy;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cii:cepidt:2018-01. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: http://edirc.repec.org/data/cepiifr.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.