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Immigration, Information, and Trade Margins

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  • Shan (Victor) Jiang

    (University of Calgary)

Abstract

Recent theories suggest that better information in destination countries could reduce firm’s fixed export costs,lower uncertaintyo f trade policy responses,and improve policy making processes.To identify the relation betweeninformation and fixed export costs,I investigate how information, measured by immigration, affects extensive and intensive margins.The theoretical model predicts that higher fixed export costs reduce trade along the extensive margin,and higher variable export costs lower trade along both margins.Using a gravity model of Canada’s trade data with 125 partners over 1988-2004,I find immigrant stocks residing in Canada mainly affect the extensive margin rather than the intensive margin.This is evidence that information primarily affects fixed export costs.

Suggested Citation

  • Shan (Victor) Jiang, "undated". "Immigration, Information, and Trade Margins," Working Papers 2007-16, Department of Economics, University of Calgary, revised 31 Oct 2007.
    • Handle: RePEc:clg:wpaper:2007-16
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    File URL: https://econ.ucalgary.ca/sites/econ.ucalgary.ca.manageprofile/files/unitis/publications/162-34053/ImmigrationInformationandTradeMargins.pdf
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    References listed on IDEAS

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    1. Gabriel J Felbermayr & Wilhelm Kohler, 2014. "Exploring the Intensive and Extensive Margins of World Trade," World Scientific Book Chapters, in: European Economic Integration, WTO Membership, Immigration and Offshoring, chapter 4, pages 115-148, World Scientific Publishing Co. Pte. Ltd..
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    6. Andrew K. Rose, 2007. "The Foreign Service and Foreign Trade: Embassies as Export Promotion," The World Economy, Wiley Blackwell, vol. 30(1), pages 22-38, January.
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    13. Roberts, Mark J & Tybout, James R, 1997. "The Decision to Export in Colombia: An Empirical Model of Entry with Sunk Costs," American Economic Review, American Economic Association, vol. 87(4), pages 545-564, September.
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    15. Dunlevy, James A. & Hutchinson, William K., 1999. "The Impact of Immigration on American Import Trade in the Late Nineteenth and Early Twentieth Centuries," The Journal of Economic History, Cambridge University Press, vol. 59(4), pages 1043-1062, December.
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    Cited by:

    1. José Vicente Blanes, 2010. "The link between immigration and trade in developing countries," Working Papers 10-07, Asociación Española de Economía y Finanzas Internacionales.
    2. Noel Gaston & Douglas R. Nelson, 2013. "Bridging Trade Theory And Labour Econometrics: The Effects Of International Migration," Journal of Economic Surveys, Wiley Blackwell, vol. 27(1), pages 98-139, February.
    3. Roger White, 2010. "Migration and International Trade," Books, Edward Elgar Publishing, number 13670.
    4. Golovan, Sergei & Volchkova, Natalya, 2022. "How costly is exporting? An empirical assessment of trade model with heterogeneous firms," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 68, pages 93-116.
    5. Roger White & Bedassa Tadesse, 2011. "International Migration and Economic Integration," Books, Edward Elgar Publishing, number 14318.

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    More about this item

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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