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Does Immigration Help to Explain Intra-Industry Trade? Evidence for Spain

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  • José V. Blanes

Abstract

This paper argues and provides evidence that the stock of immigrants in a country have a positive effect on the share of its bilateral intra-industry trade (IIT). The paper links the literatures about immigration and trade and about IIT determinants. The key is that immigration contributes to trade transaction costs reduction and this would benefit more intra than inter-industry trade. We test this hypothesis using Spanish data and departing from the models developed by Helpman (1987). Immigration helps more IIT in manufactures and IIT between Spain and less developed countries. Results are robust both to different estimation methods and specifications.
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  • José V. Blanes, 2005. "Does Immigration Help to Explain Intra-Industry Trade? Evidence for Spain," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 141(2), pages 244-270, July.
    • Handle: RePEc:spr:weltar:v:141:y:2005:i:2:p:244-270
    DOI: 10.1007/s10290-005-0027-7
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    More about this item

    Keywords

    Intra-industry trade; immigration; Spain;
    All these keywords.

    JEL classification:

    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

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