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Trade and Migration: Firm-Level Evidence

  • Hatzigeorgiou, Andreas

    (Department of Economics, Lund University)

  • Lodefalk, Magnus

    ()

    (Department of Economics, Lund University)

Migration has been associated with higher levels of trade. Previous studies interpret this as evidence of migrants’ ability to lower trade costs. Nevertheless, no study has investigated the impact of migrants on firms’ foreign trade. Thus, they fail to both provide evidence on the role that migrants may play in lowering firms’ trade costs, and exactly through which mechanisms the impact is derived. This study, being the first to study in depth the impact of immigration on trade at the firm level, bridges this gap in research. It utilizes new and unique employer-employee data for 12,000 Swedish firms, for the period 1998-2007, in a firm-level gravity framework. It provides novel firm-level evidence, demonstrating a significant, positive, and robust impact of immigrants in raising firms’ foreign trade. Migrants are found to increase trade both on the extensive and intensive product margin. Further, the study is able to conclude that the sustained effect mainly derives from lower information frictions through superior knowledge of foreign-markets, although contacts are also important.

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File URL: http://project.nek.lu.se/publications/workpap/papers/WP11_39.pdf
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Paper provided by Lund University, Department of Economics in its series Working Papers with number 2011:39.

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Length: 86 pages
Date of creation: 13 Dec 2011
Date of revision:
Handle: RePEc:hhs:lunewp:2011_039
Contact details of provider: Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund,Sweden
Phone: +46 +46 222 0000
Fax: +46 +46 2224613
Web page: http://www.nek.lu.se/en

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  1. Djankov, Simeon & La Porta, Rafael & Shleifer, Andrei & Lopez de Silanes, Florencio, 2001. "The regulation of entry," Policy Research Working Paper Series 2661, The World Bank.
  2. Simeon Djankov & Oliver Hart & Caralee McLiesh & Andrei Shleifer, 2006. "Debt Enforcement Around the World," NBER Working Papers 12807, National Bureau of Economic Research, Inc.
  3. Thierry Mayer & Soledad Zignago, 2011. "Notes on CEPII’s distances measures: The GeoDist database," Working Papers 2011-25, CEPII research center.
  4. Simeon Djankov & Rafael LaPorta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2005. "The Law and Economics of Self-Dealing," NBER Working Papers 11883, National Bureau of Economic Research, Inc.
  5. Justin R. Pierce & Peter K. Schott, 2009. "Concording U.S. Harmonized System Categories Over Time," NBER Working Papers 14837, National Bureau of Economic Research, Inc.
  6. Simeon Djankov & Caralee McLiesh & Andrei Shleifer, 2005. "Private Credit in 129 Countries," NBER Working Papers 11078, National Bureau of Economic Research, Inc.
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