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Trade, Variety, and Immigration

  • Chen Bo
  • David S. Jacks

What are the gains from international trade? And how do immigrants influence this process? While economists have considered these questions before, particularly in the context of aggregate trade flows, there has been no work assessing the relation between immigration and international trade in varieties--that is, the trade of particular goods from particular geographic areas. We consider the case of Canada, document its impressive experience with import variety growth in the period from 1988 to 2007, and relate this variety growth to the process of immigration. We find that import varieties grew 76%, that this growth is associated with a welfare gain to Canadian consumers as large as 28%, and that enhanced immigration flows may be responsible for 25% of this variety growth and its attendant welfare gains for native-born Canadians.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17963.

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Date of creation: Mar 2012
Date of revision:
Publication status: published as Chen, Bo & Jacks, David S., 2012. "Trade, variety, and immigration," Economics Letters, Elsevier, vol. 117(1), pages 243-246.
Handle: RePEc:nbr:nberwo:17963
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  1. Christian Broda & David E. Weinstein, 2004. "Globalization and the gains from variety," Staff Reports 180, Federal Reserve Bank of New York.
  2. Feenstra, Robert C, 1994. "New Product Varieties and the Measurement of International Prices," American Economic Review, American Economic Association, vol. 84(1), pages 157-77, March.
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