IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

On the Pro-Trade Effects of Immigrants

  • Massimiliano Bratti

    ()

    (University of Milan)

  • Luca de Benedictis

    ()

    (University of Macerata)

  • Gianluca Santoni

    ()

    (Fondazione Manlio Masi and University of Rome “Tor Vergata”)

n this paper we investigate the causal effect of immigration on trade flows. We exploit the very favorable set-up offered by the Italian panel data — the fine geographical disaggregation (provinces, i.e., Nomenclature of territorial units for statistics 3 level — NUTS-3), the very high number of countries of origin of immigrants (‘super-diversity’), the high heterogeneity of social and economic characteristics of Italian provinces, and the absence of cultural (e.g. language) or historical (colonial ties) attractors for immigration to deal with the possible distortions generated by the choice of the areal unit (the so-called Modifiable Areal Unit Problem — MAUP), comparing estimates at the NUTS-2 and NUTS-3 geographical level; with unobserved heterogeneity, controlling for a wide set of fixed effects; with the endogeneity of immigrants\' location choices, using instruments based on immigrants\' enclaves. We find that immigrants have a significant positive effect on both exports and imports, much larger for the latter. The pro-trade effects of immigrants tend to decline in space, and even turn negative when large ethnic communities are located too far away from a specific province (via a trade-diversion effect). Finally, we give evidence of a substantial heterogeneity in the effects of immigrants: the impact on trade tends to be larger for immigrants coming from low-income countries, for earlier waves of immigrants and for the less advanced provinces of Southern Italy.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.dagliano.unimi.it//media/WP2012_347.pdf
Download Restriction: no

Paper provided by Centro Studi Luca d\'Agliano, University of Milano in its series Development Working Papers with number 347.

as
in new window

Length: 44
Date of creation: 13 Nov 2012
Date of revision: 13 Nov 2012
Handle: RePEc:csl:devewp:347
Contact details of provider: Postal: Via Conservatorio 7 - 20122 Milano
Phone: +39 02 503 16486
Fax: +39 02 503 16475
Web page: http://www.dagliano.unimi.it/

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Andersson, Roland & Quigley, John M. & Wilhelmsson, Mats, 2004. "University Decentralization as Regional Policy: The Swedish Experiment," Berkeley Program on Housing and Urban Policy, Working Paper Series qt81n6b8fb, Berkeley Program on Housing and Urban Policy.
  2. Joao Santos Silva & Silvana Tenreyro, 2005. "The log of gravity," LSE Research Online Documents on Economics 3744, London School of Economics and Political Science, LSE Library.
  3. Bandyopadhyay, Subhayu & Coughlin, Cletus C. & Wall, Howard J., 2006. "Ethnic Networks and U.S. Exports," IZA Discussion Papers 1998, Institute for the Study of Labor (IZA).
  4. Gaulier, Guillaume & Zignago, Soledad, 2004. "Notes on BACI (analytical database of international trade). 1989-2002 version," MPRA Paper 32401, University Library of Munich, Germany.
  5. Keith Head & Thierry Mayer & John Ries, 2011. "The erosion of colonial trade linkages after independence," Sciences Po publications info:hdl:2441/c8dmi8nm4pd, Sciences Po.
  6. 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.
  7. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," Boston College Working Papers in Economics 593, Boston College Department of Economics.
  8. Roger White & Bedassa Tadesse, 2007. "Immigration Policy, Cultural Pluralism And Trade: Evidence From The White Australia Policy," Pacific Economic Review, Wiley Blackwell, vol. 12(4), pages 489-509, October.
  9. Briant, A. & Combes, P.-P. & Lafourcade, M., 2010. "Dots to boxes: Do the size and shape of spatial units jeopardize economic geography estimations?," Journal of Urban Economics, Elsevier, vol. 67(3), pages 287-302, May.
  10. Giovanni Peri & Francisco Requena, 2009. "The Trade Creation Effect of Immigrants: Evidence from the Remarkable Case of Spain," NBER Working Papers 15625, National Bureau of Economic Research, Inc.
  11. Bianchi, Milo & Buonanno, Paolo & Pinotti, Paolo, 2012. "Do Immigrants Cause Crime?," Economics Papers from University Paris Dauphine 123456789/5382, Paris Dauphine University.
  12. Andersson, Roland & Quigley, John M. & Wilhelmsson, Mats, 2009. "Urbanization, Productivity and Innovation: Evidence from Investment in Higher Education," Berkeley Program on Housing and Urban Policy, Working Paper Series qt9b4885mq, Berkeley Program on Housing and Urban Policy.
  13. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
  14. Gil S. Epstein & Ira Gang, 2004. "Ethnic Networks and International Trade," Departmental Working Papers 200425, Rutgers University, Department of Economics.
  15. Debaere, Peter & Lee, Hongshik & Lee, Joonhyung, 2012. "Language, Ethnicity and Intra-firm Trade," CEPR Discussion Papers 9029, C.E.P.R. Discussion Papers.
  16. Wagner, Don & Head, Keith & Ries, John, 2002. "Immigration and the Trade of Provinces," Scottish Journal of Political Economy, Scottish Economic Society, vol. 49(5), pages 507-25, December.
  17. Jonathan Eaton & Samuel Kortum, 2001. "Trade in Capital Goods," NBER Working Papers 8070, National Bureau of Economic Research, Inc.
  18. Jonathan Eaton & Akiko Tamura, 1995. "Bilateralism and Regionalism in Japanese and U.S. Trade and Direct Foreign Investment Patterns," NBER Working Papers 4758, National Bureau of Economic Research, Inc.
  19. Bart J. Bronnenberg & Jean-Pierre H. Dube & Matthew Gentzkow, 2012. "The Evolution of Brand Preferences: Evidence from Consumer Migration," American Economic Review, American Economic Association, vol. 102(6), pages 2472-2508, October.
  20. Cletus C. Coughlin & Howard J. Wall, 2010. "Ethnic networks and trade: intensive vs. extensive margins," Working Papers 2010-016, Federal Reserve Bank of St. Louis.
  21. Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2007. "Estimating Trade Flows: Trading Partners and Trading Volumes," NBER Working Papers 12927, National Bureau of Economic Research, Inc.
  22. John C. Driscoll & Aart C. Kraay, 1998. "Consistent Covariance Matrix Estimation With Spatially Dependent Panel Data," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 549-560, November.
  23. J. M. C. Santos Silva & Silvana Tenreyro, 2009. "Further Simulation Evidence on the Performance of the Poisson Pseudo-Maximum Likelihood Estimator," CEP Discussion Papers dp0933, Centre for Economic Performance, LSE.
  24. David Atkin, 2013. "Trade, Tastes and Nutrition in India," Working Papers id:5548, eSocialSciences.
  25. 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.
  26. James E. Rauch & Vitor Trindade, 1999. "Ethnic Chinese Networks in International Trade," NBER Working Papers 7189, National Bureau of Economic Research, Inc.
  27. Frédéric DOCQUIER & Hillel RAPOPORT, 2011. "Globalization, brain drain and development," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2011009, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  28. Xuepeng Liu, 2009. "GATT/WTO Promotes Trade Strongly: Sample Selection and Model Specification," Review of International Economics, Wiley Blackwell, vol. 17(3), pages 428-446, 08.
  29. Genc, Murat & Gheasi, Masood & Nijkamp, Peter & Poot, Jacques, 2011. "The Impact of Immigration on International Trade: A Meta-Analysis," IZA Discussion Papers 6145, Institute for the Study of Labor (IZA).
  30. Frédéric Docquier & B. Lindsay Lowell & Abdeslam Marfouk, 2009. "A Gendered Assessment of Highly Skilled Emigration," Population and Development Review, The Population Council, Inc., vol. 35(2), pages 297-321.
  31. Artal-Tur, Andrés & Pallardó-López, Vicente J. & Requena-Silvente, Francisco, 2012. "The trade-enhancing effect of immigration networks: New evidence on the role of geographic proximity," Economics Letters, Elsevier, vol. 116(3), pages 554-557.
  32. 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.
  33. Mayer, Thierry & Zignago, Soledad, 2006. "Notes on CEPII’s distances measures," MPRA Paper 26469, University Library of Munich, Germany.
  34. 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.
  35. James E. Anderson, 2010. "The Gravity Model," NBER Working Papers 16576, National Bureau of Economic Research, Inc.
  36. Coughlin, Cletus C. & Wall, Howard J., 2011. "Ethnic networks and trade: Intensive versus extensive margins," Economics Letters, Elsevier, vol. 113(1), pages 73-75, October.
  37. 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 302-16, May.
  38. Sanne Hiller, 2013. "Does immigrant employment matter for export sales? Evidence from Denmark," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 149(2), pages 369-394, June.
  39. Francesco Aiello & Vincenzo Scoppa, 2000. "Uneven Regional Development in Italy: Explaining Differences in Productivity Levels," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 59(2), pages 270-298, September.
  40. Davide Castellani, 2002. "Export behavior and productivity growth: Evidence from Italian manufacturing firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 138(4), pages 605-628, December.
  41. Daniel Hoechle, 2007. "Robust standard errors for panel regressions with cross-sectional dependence," Stata Journal, StataCorp LP, vol. 7(3), pages 281-312, September.
  42. 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.
  43. Anthony Briant & Pierre-Philippe Combes & Miren Lafourcade, 2009. "Product complexity, quality of institutions and the pro-trade effect of immigrants," PSE Working Papers halshs-00566772, HAL.
  44. Rauch, James E., 1999. "Networks versus markets in international trade," Journal of International Economics, Elsevier, vol. 48(1), pages 7-35, June.
  45. Felbermayr, Gabriel & Jung, Benjamin & Toubal, Farid, 2009. "Ethnic networks, information, and international trade: Revisiting the evidence," Munich Reprints in Economics 20602, University of Munich, Department of Economics.
  46. Roger White, 2007. "Immigrant-trade links, transplanted home bias and network effects," Applied Economics, Taylor & Francis Journals, vol. 39(7), pages 839-852.
  47. J. M. C. Santos Silva & Silvana Tenreyro, 2011. "poisson: Some convergence issues," Stata Journal, StataCorp LP, vol. 11(2), pages 215-225, June.
  48. Sourafel Girma & Zhihao Yu, 2002. "The link between immigration and trade: Evidence from the United Kingdom," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 138(1), pages 115-130, March.
  49. James A. Dunlevy, 2006. "The Influence of Corruption and Language on the Protrade Effect of Immigrants: Evidence from the American States," The Review of Economics and Statistics, MIT Press, vol. 88(1), pages 182-186, February.
  50. Bart J. Bronnenberg & Jean-Pierre H. Dube & Matthew Gentzkow, 2010. "The Evolution of Brand Preferences: Evidence from Consumer Migration," NBER Working Papers 16267, National Bureau of Economic Research, Inc.
  51. 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(04), pages 1043-1062, December.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:csl:devewp:347. 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: (Chiara Elli)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.