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Isolating the Network Effect of Immigrants on Trade

Author

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  • Aleksynska, Mariya

    () (ILO International Labour Organization)

  • Peri, Giovanni

    () (University of California, Davis)

Abstract

Within the migration-trade nexus literature, this paper proposes a more carefully defined measure of migration business networks, and quantifies its impact on bilateral trade. Using cross-sectional data and controlling for the overall bilateral stock of migrants, the share of migrants employed in managerial/business-related occupations has a strong additional effect on trade, and especially on exports. Those immigrants should be the ones directly involved in the diffusion and transmission of information relevant for companies trading with other countries. Their presence is found to increase the volume of trade beyond the already known effect of immigrants or highly educated immigrants. When we control for the presence of highly educated immigrants, the share of immigrants in business network occupations shows a particularly large effect on trade in differentiated goods. Specifically, we find that highly educated individuals in business-related occupations are those contributing to export by the largest margin. Business network effects seem particularly important in stimulating exports to culturally different countries, such as those with different legal origin.

Suggested Citation

  • Aleksynska, Mariya & Peri, Giovanni, 2012. "Isolating the Network Effect of Immigrants on Trade," IZA Discussion Papers 6941, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp6941
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    More about this item

    Keywords

    migration; international trade; business networks; differentiated goods;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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