Do African Immigrants Enhance Their Home Nations’ Trade With Their Hosts?

Abstract

Employing data on the immigrant stocks of 43 African home countries who reside in 110 host countries and on trade flows between these countries during the year 2005, we examine whether African immigrants exert positive effects on their home countries' trade with the typical host country. Estimates from Tobit regression models indicate a one percent increase in the number of African immigrants in a given host country increases that country's exports to and imports from the typical home country by 0.132 percent and 0.259 percent, respectively. Further evaluation of these effects from the perspective of each African home country reveals that, in several instances, immigrants do not exert positive and significant influences on trade flows. The considerable variation in the presence of pro-trade influences and the dissimilarity of estimated significant effects suggests that highly divergent immigration and trade structures among African countries may affect whether African immigrants exert pro-trade influences.JEL Classifications: F14 F15 F22 O11

Aid, trade and migration: How do bilateral flows interact?

“…Controlling again for possible endogeneity biases, the 2SLS estimates show that coefficients are very similar to the benchmark 3SLS estimates. The insignificance of the trade–migration relationship confirms the hypothesis that the number of immigrants newly arrived in a country has to be sufficient to explain changes in trade (Tadesse & White, ).…”

“…Migration inflows enter with a negative sign, implying that new migrants cause a decrease in exports to developing countries. According to Tadesse and White (), there is a threshold (a minimum number of migrants) beyond which migrants can trigger bilateral exports. Under this threshold, a negative effect can appear due to a loss of consumption in the migrant origin country.…”

Does Migration Foster Exports? Evidence from Africa

“…Questioning the pro-trade effect of migrants, Parsons (2012) found that migration had a positive effect only on northern exports to the South. Finally, using cross-section data, Tadesse and White (2013) showed that African migrants significantly promoted African trade. However, their empirical approach does not control for the possible endogeneity of migration and they do not analyze the mechanisms through which African migrants could promote African trade.…”