Migration and Trade

Theoretical and empirical research in economics suggests that bilateral migration triggers bilateral trade through a number of channels. This paper assesses the functional form of the impact of migration on trade flows in a quasi‐experimental setting. We provide evidence that the relationship is not...

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Bibliographic Details
Published inWorld economy Vol. 35; no. 2; pp. 216 - 241
Main Authors Egger, Peter H., von Ehrlich, Maximilian, Nelson, Douglas R.
Format Journal Article
LanguageEnglish
Published Oxford, UK Blackwell Publishing Ltd 01.02.2012
Subjects
Bilateral Trade
Cross-national analysis
Economic theory
Elasticity
Empirical Methods
Immigrants
Immigration
International trade
Labour migration
Linear models
Migration
Noncitizens
Stocks
Studies
Trade
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Summary:Theoretical and empirical research in economics suggests that bilateral migration triggers bilateral trade through a number of channels. This paper assesses the functional form of the impact of migration on trade flows in a quasi‐experimental setting. We provide evidence that the relationship is not log‐linear. In particular, at small levels of immigration (stocks) the elasticity of trade to migration is quite high, and it declines to zero at about 4,000 immigrants. If immigration stocks exceed such a level, the evidence suggests that trade will not increase anymore. This suggests that for cross‐country network and other effects flowing from immigration to materialise at a significant level for trade, a high‐enough level of immigrant stocks is necessary. But there appears to be satiation as immigrant numbers increase.
Bibliography:istex:C063484DFADCFC13BE6286735D08B9C11EE7F2F3
ArticleID:TWEC1429
ark:/67375/WNG-4QRNXBQD-P
Global Migration: Economics, Politics, Policy
We are grateful to the participants of the conference
on March 11–12, 2011, at the Murphy Institute of Tulane University, New Orleans.
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ISSN:0378-5920
1467-9701
DOI:10.1111/j.1467-9701.2011.01429.x