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On the Pro-Trade Effects of Immigrants

  • Bratti, Massimiliano

    ()

    (University of Milan)

  • De Benedictis, Luca

    ()

    (University of Macerata)

  • Santoni, Gianluca

    ()

    (University of Rome Tor Vergata)

In this paper we investigate the causal effect of immigration on trade flows, using Italian panel data covering very small geographical units (NUTS-3). Exploiting the very favorable setup offered by Italy's features – the very high number of countries of origin of immigrants ('super-diversity'), the high heterogeneity of social and economic characteristics of Italian provinces coupled with the absence of cultural (e.g. language) or historical (colonial ties) attractors for immigration –, controlling for a wide set of fixed effects, and dealing with the possible distortions generated by the inappropriate choice of the areal unit, we find a positive association between immigrants' stocks and both export and import flows, in line with the past literature. However, using instrumental variables based on migration enclaves, we show that immigrants have a positive and significant effect on imports only.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6628.

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Length: 43 pages
Date of creation: Jun 2012
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Handle: RePEc:iza:izadps:dp6628
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