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Trade and Migration: Firm-Level Evidence

Author

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  • Hatzigeorgiou, Andreas

    (Department of Economics, Lund University)

  • Lodefalk, Magnus

    () (Department of Economics, Lund University)

Abstract

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.

Suggested Citation

  • Hatzigeorgiou, Andreas & Lodefalk, Magnus, 2011. "Trade and Migration: Firm-Level Evidence," Working Papers 2011:39, Lund University, Department of Economics.
  • Handle: RePEc:hhs:lunewp:2011_039
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    References listed on IDEAS

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    Cited by:

    1. Ejaz Ghani & William R. Kerr & Christopher Stanton, 2014. "Diasporas and Outsourcing: Evidence from oDesk and India," Management Science, INFORMS, vol. 60(7), pages 1677-1697, July.
    2. Pierpaolo Parrotta & Dario Pozzoli & Mariola Pytlikova, 2014. "The nexus between labor diversity and firm’s innovation," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(2), pages 303-364, April.
    3. Sari Pekkala Kerr & William R. Kerr, 2015. "Global Collaborative Patents," NBER Working Papers 21735, National Bureau of Economic Research, Inc.
    4. Mitaritonna, Cristina & Orefice, Gianluca & Peri, Giovanni, 2014. "Immigrants and Firms' Productivity: Evidence from France," IZA Discussion Papers 8063, Institute for the Study of Labor (IZA).
    5. Graneli, Anna & Lodefalk, Magnus, 2014. "Temporary Expats for Export: Firm-Level Evidence," Working Papers 2014:4, Örebro University, School of Business.
    6. Sanne Hiller, 2013. "Does immigrant employment matter for export sales? Evidence from Denmark," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 149(2), pages 369-394, June.
    7. Pierpaolo Parrotta & Dario Pozzoli & Mariola Pytlikova, 2014. "The nexus between labor diversity and firm’s innovation," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(2), pages 303-364, April.
    8. repec:anr:reveco:v:9:y:2017:p:201-234 is not listed on IDEAS
    9. Sari Pekkala Kerr & William Kerr & Çağlar Özden & Christopher Parsons, 2017. "High-Skilled Migration and Agglomeration," Annual Review of Economics, Annual Reviews, vol. 9(1), pages 201-234, September.
    10. William R. Kerr, 2013. "U.S. High-Skilled Immigration, Innovation, and Entrepreneurship: Empirical Approaches and Evidence," NBER Working Papers 19377, National Bureau of Economic Research, Inc.
    11. Joan Martín-Montaner & Francisco Requena & Guadalupe Serrano, 2014. "International trade and migrant networks: Is It really about qualifications?," Estudios de Economia, University of Chile, Department of Economics, vol. 41(2 Year 20), pages 251-260, December.
    12. Michael Good, 2013. "Geographic Proximity and the Pro-trade Effect of Migration: State-level Evidence from Mexican Migrants in the United States," 2013 Papers pgo530, Job Market Papers.
    13. Egger, Peter & Nelson, Doug R & von Ehrlich, Maximilian, 2012. "The Trade Effects of Skilled versus Unskilled Migration," CEPR Discussion Papers 9053, C.E.P.R. Discussion Papers.
    14. Michael Good, 2012. "How Localized is the Pro-trade Effect of Immigration? Evidence from Mexico and the United States," Working Papers 1203, Florida International University, Department of Economics.

    More about this item

    Keywords

    trade costs; information; trust; migration; heterogeneous firms; gravity; firmlevel data; product margins;

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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