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Immigrant’s Characteristics and their different effects on bilateral trade. Evidence from Spain

Author

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  • José V. Blanes

    () (Department of Economics, Universidad Pablo de Olavide)

Abstract

This paper tests for the impact of immigration on bilateral trade using Spanish data from 1995 to 2003. It also explores some possible mechanisms behind this link. It uses a gravity equation for trade augmented with an immigrants stock variable and a set of control variables. The immigrants variable enters the estimated equation in different ways depending on immigrant relevant characteristics both individual and non individual-specific. Results show that there is a positive link between immigration and both exports and imports. We find evidence for the trade transaction cost channel but not for the preference one. The mechanisms behind this link are the information effect – immigrant’s additional information about product and about social and political institutions - and the social o ethnic network effect - immigrants with a medium level of education and those related to business activities are the one who have a positive effect on bilateral trade.

Suggested Citation

  • José V. Blanes, 2006. "Immigrant’s Characteristics and their different effects on bilateral trade. Evidence from Spain," Working Papers 06.08, Universidad Pablo de Olavide, Department of Economics.
  • Handle: RePEc:pab:wpaper:06.08
    as

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    File URL: http://www.upo.es/serv/bib/wps/econ0608.pdf
    File Function: First version, 2006
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    References listed on IDEAS

    as
    1. Sourafel Girma & Zhihao Yu, 2002. "The link between immigration and trade: Evidence from the United Kingdom," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 138(1), pages 115-130, March.
    2. Keith Head & John Ries, 1998. "Immigration and Trade Creation: Econometric Evidence from Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 31(1), pages 47-62, February.
    3. Rauch, James E., 1999. "Networks versus markets in international trade," Journal of International Economics, Elsevier, vol. 48(1), pages 7-35, June.
    4. James E. Rauch, 2001. "Business and Social Networks in International Trade," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1177-1203, December.
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    Citations

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    Cited by:

    1. Flisi, Sara & Murat, Marina, 2011. "The hub continent. Immigrant networks, emigrant diasporas and FDI," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(6), pages 796-805.
    2. White, Roger & Tadesse, Bedassa, 2008. "Immigrants, cultural distance and U.S. state-level exports of cultural products," The North American Journal of Economics and Finance, Elsevier, vol. 19(3), pages 331-348, December.
    3. Tadesse, Bedassa & White, Roger, 2008. "Do immigrants counter the effect of cultural distance on trade? Evidence from US state-level exports," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(6), pages 2304-2318, December.

    More about this item

    Keywords

    International Trade; Migration.;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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