IDEAS home Printed from https://ideas.repec.org/p/onb/oenbwp/275.html

Immigration and Trade Creation: Evidence from the Extensive and Intensive Margins (Ana Abeliansky, Inmaculada Martinez-Zarzoso, Anna Raggl)

Author

Listed:
  • Ana Abeliansky

    (Oesterreichische Nationalbank, International Economics)

  • Inmaculada Martinez-Zarzoso

    (University of Goettingen)

  • Anna Katharina Raggl

    (Oesterreichische Nationalbank, International Economics)

Abstract

This paper reexamines the trade creation effects of migration using a large sample of 180 countries from 1995 to 2023. We estimate a structural gravity model of bilateral trade augmented with migration stocks, investigating whether immigration to OECD countries relates to the extensive and intensive margins of trade. To address potential endogeneity, we apply a two-step control function approach based on a first-stage gravity model of migration that exploits bilateral and time variation in migration regularization policies across OECD countries. Results obtained using PPML estimators show robust pro-trade effects of migration through the extensive margin, with non-linearities and heterogeneity across product types. The findings show that migration primarily fosters exports of new, differentiated products, while effects on the intensive margin are weaker for different types of goods. These results stress the role of migrant networks as facilitators of new trade relationships and highlight policy implications for migration and trade integration.

Suggested Citation

  • Ana Abeliansky & Inmaculada Martinez-Zarzoso & Anna Katharina Raggl, 2026. "Immigration and Trade Creation: Evidence from the Extensive and Intensive Margins (Ana Abeliansky, Inmaculada Martinez-Zarzoso, Anna Raggl)," Working Papers 275, Oesterreichische Nationalbank (Austrian Central Bank).
    • Handle: RePEc:onb:oenbwp:275
    as

    Download full text from publisher

    File URL: https://www.oenb.at/dam/jcr:5183abce-00cb-4bee-ad84-64ba754aa039/wp-275.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. James E. Anderson & Yoto V. Yotov, 2025. "Gravity in Transition," Review of International Economics, Wiley Blackwell, vol. 33(3), pages 616-630, August.
    2. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    3. Bergstrand, Jeffrey H. & Clance, Matthew W. & Santos Silva, J.M.C., 2025. "The tails of gravity: Using expectiles to quantify the trade-margins effects of economic integration agreements," Journal of International Economics, Elsevier, vol. 157(C).
    4. Felbermayr, Gabriel J. & Toubal, Farid, 2012. "Revisiting the Trade-Migration Nexus: Evidence from New OECD Data," World Development, Elsevier, vol. 40(5), pages 928-937.
    5. Baier, Scott L. & Yotov, Yoto V. & Zylkin, Thomas, 2019. "On the widely differing effects of free trade agreements: Lessons from twenty years of trade integration," Journal of International Economics, Elsevier, vol. 116(C), pages 206-226.
    6. Baier, Scott L. & Bergstrand, Jeffrey H. & Feng, Michael, 2014. "Economic integration agreements and the margins of international trade," Journal of International Economics, Elsevier, vol. 93(2), pages 339-350.
    7. Dutt, Pushan & Mihov, Ilian & Van Zandt, Timothy, 2013. "The effect of WTO on the extensive and the intensive margins of trade," Journal of International Economics, Elsevier, vol. 91(2), pages 204-219.
    8. Ana Cecília Fieler & Jonathan Eaton, 2025. "The Margins of Trade," Econometrica, Econometric Society, vol. 93(1), pages 129-160, January.
    9. Massimiliano Bratti & Luca Benedictis & Gianluca Santoni, 2014. "On the pro-trade effects of immigrants," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 150(3), pages 557-594, August.
    10. Bastos, Paulo & Silva, Joana, 2012. "Networks, firms, and trade," Journal of International Economics, Elsevier, vol. 87(2), pages 352-364.
    11. Debaere, Peter & Mostashari, Shalah, 2010. "Do tariffs matter for the extensive margin of international trade? An empirical analysis," Journal of International Economics, Elsevier, vol. 81(2), pages 163-169, July.
    12. Anna Maria Ferragina & Stefano Iandolo & Erol Taymaz, 2021. "Migration and comparative advantages: new evidence on the EU-MENA region," International Journal of Manpower, Emerald Group Publishing Limited, vol. 42(5), pages 904-934, January.
    13. Dunlevy, James A. & Hutchinson, William K., 1999. "The Impact of Immigration on American Import Trade in the Late Nineteenth and Early Twentieth Centuries," The Journal of Economic History, Cambridge University Press, vol. 59(4), pages 1043-1062, December.
    14. repec:hal:pseose:hal-00783759 is not listed on IDEAS
    15. Christian Broda & David E. Weinstein, 2006. "Globalization and the Gains From Variety," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(2), pages 541-585.
    16. Baier, Scott L. & Bergstrand, Jeffrey H., 2007. "Do free trade agreements actually increase members' international trade?," Journal of International Economics, Elsevier, vol. 71(1), pages 72-95, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cheong, Juyoung, 2023. "Do preferential trade agreements stimulate high-tech exports for low-income countries?," Economic Modelling, Elsevier, vol. 127(C).
    2. Christopher R. Parsons & L. Alan Winters, 2014. "International migration, trade and aid: a survey," Chapters, in: Robert E.B. Lucas (ed.), International Handbook on Migration and Economic Development, chapter 4, pages 65-112, Edward Elgar Publishing.
    3. Said, Rashidi & Ismail, Normaz Wana, 2018. "The Impacts of Malaysian Free Trade Agreements on Margins of Trade," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 52(1), pages 169-178.
    4. Cheong, Juyoung & Kwak, Do Won & Tang, Kam Ki, 2018. "The trade effects of tariffs and non-tariff changes of preferential trade agreements," Economic Modelling, Elsevier, vol. 70(C), pages 370-382.
    5. Dutt, Pushan, 2020. "The WTO is not passé," European Economic Review, Elsevier, vol. 128(C).
    6. Yoto V. Yotov, 2024. "The evolution of structural gravity: The workhorse model of trade," Contemporary Economic Policy, Western Economic Association International, vol. 42(4), pages 578-603, October.
    7. Mario Larch & José‐Antonio Monteiro & Roberta Piermartini & Yoto V. Yotov, 2025. "On the trade effects of GATT/WTO membership: They are positive and large after all," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 58(1), pages 281-328, February.
    8. Díaz-Mora, Carmen & Esteve-Pérez, Silviano & Gil-Pareja, Salvador, 2023. "A re-assessment of the heterogeneous effect of trade agreements using intra-national trade flows," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 940-951.
    9. Hinnerk Gnutzmann & Arevik Gnutzmann-Mkrtchyan & Tobias Korn, 2021. "Consequences of FTA Withdrawal: Evidence from "Uxit"," CESifo Working Paper Series 8859, CESifo.
    10. Machado, José A.F. & Santos Silva, J.M.C. & Wei, Kehai, 2016. "Quantiles, corners, and the extensive margin of trade," European Economic Review, Elsevier, vol. 89(C), pages 73-84.
    11. Gnutzmann, Hinnerk & Gnutzmann-Mkrtchyan, Arevik & Korn, Tobias, 2021. "Consequences of FTA Withdrawal: Evidence from 'Uxit'," Hannover Economic Papers (HEP) dp-681, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    12. Bergstrand, Jeffrey H. & Clance, Matthew W. & Santos Silva, J.M.C., 2025. "The tails of gravity: Using expectiles to quantify the trade-margins effects of economic integration agreements," Journal of International Economics, Elsevier, vol. 157(C).
    13. Hinnerk Gnutzmann & Arevik Gnutzmann-Mkrtchyan & Tobias Korn, 2025. "Reversal of Economic Integration: Evidence from EU Enlargement," Working Papers 407, Leibniz Institut für Ost- und Südosteuropaforschung (Leibniz Institute for East and Southeast European Studies).
    14. Christian Elleby & Wusheng Yu & Qian Yu, 2018. "The Chinese Export Displacement Effect Revisited," IFRO Working Paper 2018/02, University of Copenhagen, Department of Food and Resource Economics.
    15. Katharina Längle, 2020. "Upgrading of Exports: Does the Integration into Trade Agreements Pave the Way to Product Upgrading?," Documents de travail du Centre d'Economie de la Sorbonne 20006, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    16. Scott L. Baier & Narendra R. Regmi, 2023. "Using Machine Learning to Capture Heterogeneity in Trade Agreements," Open Economies Review, Springer, vol. 34(4), pages 863-894, September.
    17. Rod Falvey & Neil Foster-McGregor, 2022. "The breadth of preferential trade agreements and the margins of exports," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 158(1), pages 181-251, February.
    18. Silviano Esteve-Pérez & Salvador Gil-Pareja & Rafael Llorca-Vivero, 2020. "Does the GATT/WTO promote trade? After all, Rose was right," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 156(2), pages 377-405, May.
    19. Aichele, Rahel & Heiland, Inga, 2018. "Where is the value added? Trade liberalization and production networks," Journal of International Economics, Elsevier, vol. 115(C), pages 130-144.
    20. Giorgia Giovannetti & Mauro Lonati, 2014. "The impact of product quality on the pro-trade elasticity of immigrants," Working Papers - Economics wp2014_11.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:onb:oenbwp:275. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Markus Knell (email available below). General contact details of provider: https://edirc.repec.org/data/oenbbat.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.