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The Pro-Trade Effect of Immigration on American Exports During the Late Nineteenth and Early Twentieth Centuries

Author

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  • Dunlevy, James A.

    (affiliation not available)

  • Hutchinson, William K.

    (affiliation not available)

Abstract

The belief that immigrants generate beneficial externalities in their host countries, specifically in the form of an increased opportunity and ability of firms to expand their foreign trade, has recently been challenged by George Borjas in Heaven’s Door (1999, p. 97) as having no empirical support. Borjas’ assertion ignores several recent papers that provide precisely that evidence of a powerful pro-trade effect of international migration. Here we extend that body of evidence by looking to history. We show that immigration, primarily from Europe between 1870 and 1910, had an important pro-trade effect on American exports. Our data set spans the exports of 44 commodities to 17 countries observed at 5 year intervals. We use a modified gravity model to examine the migrant stock-export relationship and find that United States exports to a country were positively related to the size of the migrant stock of immigrants from that country. The estimated strength of the effect varied across "Old" Europe, "New" Europe, and non-Europe groupings of the trading partner countries. Exports were also found to have been greater to English-speaking countries, and to countries with per capita incomes similar to the United States. This relative per capita income effect became stronger during the latter part of the period, whereas the migrant stock effect diminished after 1885.

Suggested Citation

  • Dunlevy, James A. & Hutchinson, William K., 2001. "The Pro-Trade Effect of Immigration on American Exports During the Late Nineteenth and Early Twentieth Centuries," IZA Discussion Papers 375, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp375
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    References listed on IDEAS

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    1. Raynold, Prosper & A. Dunlevy, James, 1998. "Aggregate Shocks and the Relationship between U.S. Business Cycle Fluctuations and Export Performance," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 13, pages 163-198.
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    Citations

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    Cited by:

    1. Ghatak, Subrata & Piperakis, Andromachi S., 2007. "The impact of Eastern European immigration to UK trade," Economics Discussion Papers 2007-3, School of Economics, Kingston University London.
    2. Alexander Hijzen & Peter Wright, 2010. "Migration, trade and wages," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(4), pages 1189-1211, September.
    3. Subhayu Bandyopadhyay & Cletus C. Coughlin & Howard J. Wall, 2008. "Ethnic Networks and US Exports," Review of International Economics, Wiley Blackwell, vol. 16(1), pages 199-213, February.
    4. William K. Hutchinson, 2001. ""Linguistic Distance" as a Determinant of Bilateral Trade," Vanderbilt University Department of Economics Working Papers 0130, Vanderbilt University Department of Economics, revised Oct 2003.
    5. Mahmut Yasar & David Lisner & Roderick Rejesus, 2012. "Bilateral trade impacts of temporary foreign visitor policy," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(3), pages 501-521, September.
    6. Jansen, Marion & Piermartini, Roberta, 2005. "The impact of Mode 4 liberalization on bilateral trade flows," WTO Staff Working Papers ERSD-2005-06, World Trade Organization (WTO), Economic Research and Statistics Division.
    7. William K. Hutchinson, 2002. "Does Ease of Communication Increase Trade? Commonality of Language and Bilateral Trade," Vanderbilt University Department of Economics Working Papers 0217, Vanderbilt University Department of Economics.
    8. Subrata Ghatak & Monica Ioana Pop Silaghi & Vince Daly, 2009. "Trade and migration flows between some CEE countries and the UK," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 18(1), pages 61-78.
    9. de la Mata, Tamara, 2011. "Does trade creation by social and business networks hold in services? An analysis for Accommodation and Restaurants in Spain," Working Papers in Economic Theory 2011/04, Universidad Autónoma de Madrid (Spain), Department of Economic Analysis (Economic Theory and Economic History).
    10. Jacques Poot & Anna Strutt, 2010. "International Trade Agreements and International Migration," The World Economy, Wiley Blackwell, vol. 33(12), pages 1923-1954, December.

    More about this item

    Keywords

    Ethnic networks; information and trust bridges; gravity model; export promotion; Heckscher-Ohlin model; Linder model;

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • N71 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - U.S.; Canada: Pre-1913

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