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Exports “brother-boost”: the trade-creation and skill-upgrading effect of Venezuelan forced migration on Colombian manufacturing firms

Author

Listed:
  • Carlo Lombardo

    (CEDLAS-IIE-FCE-UNLP)

  • Leonardo Peñaloza-Pacheco

    (CEDLAS-IIE-FCE-UNLP and Cornell University)

Abstract

This paper studies the impact of a massive skilled labor supply shock on Colombian manufacturing firms’ exports, the Venezuelan exodus. We exploit crosssectional and time variability of Venezuelan forced migrants’ settlements in Colombian sub-national areas through an enclave instrumental variables approach to account for the selection of immigrants’ location. Using yearly customs data from 2013 to 2019, we find that the Venezuelan migration improved Colombian manufacturing firms’ export performance, particularly to high-income countries of the OECD located in North America and low-income countries. This effect was stronger for firms that exported less prior to the exodus (2012). Furthermore, using a detailed yearly panel of manufacturing firms from 2013 to 2019 we identify the potential labor market driving mechanism of the trade-creation effect: immigrants lowered exporting firms’ blue-collar wages, and allowed them to upgrade their labor force skill composition, namely firms were able to hire workers more compatible with exports to developed destinations.

Suggested Citation

  • Carlo Lombardo & Leonardo Peñaloza-Pacheco, 2021. "Exports “brother-boost”: the trade-creation and skill-upgrading effect of Venezuelan forced migration on Colombian manufacturing firms," CEDLAS, Working Papers 0283, CEDLAS, Universidad Nacional de La Plata.
    • Handle: RePEc:dls:wpaper:0283
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    References listed on IDEAS

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    Cited by:

    1. Carlo Lombardo & Julián Martinez-Correa & Leonardo Peñaloza-Pacheco & Leonardo Gasparini, 2022. "The distributional effect of a migratory exodus in a developing country: the role of downgrading and regularization," Asociación Argentina de Economía Política: Working Papers 4573, Asociación Argentina de Economía Política.

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    More about this item

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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