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Revisiting the Trade-Migration Nexus: Evidence from New OECD data

Author

Listed:
  • Gabriel Felbermayr

    () (University of Hohenheim)

  • Farid Toubal

    () (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, ENS Cachan - École normale supérieure - Cachan)

Abstract

International migrants contribute to bilateral trade creation if their presence reduces information costs or entails additional demand for goods from their source countries. Using new data on stocks of foreign-born individuals by skill class, we try to separately quantify those two channels. We assume that improved information affects host countries' imports and exports symmetrically, while the preference channel matters for imports only. On average, for differentiated goods, both channels contribute evenly toward the total trade-creating effect of migration. In line with expectations, the relative importance of the trade cost channel is largest for homogeneous goods and for high-skilled migrants.

Suggested Citation

  • Gabriel Felbermayr & Farid Toubal, 2012. "Revisiting the Trade-Migration Nexus: Evidence from New OECD data," PSE - Labex "OSE-Ouvrir la Science Economique" hal-00783759, HAL.
  • Handle: RePEc:hal:pseose:hal-00783759
    DOI: 10.1016/j.worlddev.2011.11.016
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00783759
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