Exports and the Structure of Immigrant-Based Networks: The Role of Geographic Proximity

Herander, Mark G.; Saavedra, Luz Amparo

doi:10.1162/0034653053970311

Cited by 167 publications

(154 citation statements)

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“…In line with recent contributions (Wagner et al (2002); Dunlevy (2006); Bandyopadhyay et al (2008); Briant et al (2009) ;Peri and Requena-Silvente (2010); Herander and Saavedra (2005), see Section 2 on that) we test the relationship between trade and immigration over fine spatial units.…”

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confidence: 80%

On the pro-trade effects of immigrants

2014

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In this paper we investigate the causal effect of immigration on trade flows using Italian panel data at the province level. We exploit the exceptional characteristics of the Italian data (the fine geographical disaggregation, the very high number of countries of origin of immigrants, the high heterogeneity of social and economic characteristics of Italian provinces, and the absence of cultural or historical ties) and an empirical strategy based on the comparison of estimates at the NUTS-2 and NUTS-3 geographical level, on the use of a wide set of fixed effects, and on instrument based on immigrants' enclaves. The results are that immigrants have a significant positive effect on both exports and imports, much larger for the latter. The pro-trade effects of immigrants tend to decline in space, and even turn negative when large ethnic communities are located too far away from a specific province (via a trade-diversion effect). Finally, we give evidence of a substantial heterogeneity in the effects of immigrants: the impact on trade tends to be larger for immigrants coming from low-income countries, for earlier waves of immigrants and for the less advanced provinces of Southern Italy. AbstractIn this paper we investigate the causal effect of immigration on trade flows using Italian panel data at the province level. We exploit the exceptional characteristics of the Italian data (the fine geographical disaggregation, the very high number of countries of origin of immigrants, the high heterogeneity of social and economic characteristics of Italian provinces, and the absence of cultural or historical ties) and an empirical strategy based on the comparison of estimates at the NUTS-2 and NUTS-3 geographical level, on the use of a wide set of fixed effects, and on instrument based on immigrants' enclaves. The results are that immigrants have a significant positive effect on both exports and imports, much larger for the latter. The pro-trade effects of immigrants tend to decline in space, and even turn negative when large ethnic communities are located too far away from a specific province (via a trade-diversion effect). Finally, we give evidence of a substantial heterogeneity in the effects of immigrants: the impact on trade tends to be larger for immigrants coming from low-income countries, for earlier waves of immigrants and for the less advanced provinces of Southern Italy. JEL Classification

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confidence: 80%

On the pro-trade effects of immigrants

2014

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“…A number of recent studies have highlighted the importance of movement of people for trade (e.g. Rauch and Trindade, 2002;Herander and Saavedra, 2005;and Jansen and Piermartini, 2008). People travel to the country they import from in order to establish trade relationships, for example, because they need to find an appropriate supplier.…”

Section: Introductionmentioning

confidence: 99%

Liberalization of Air Transport Services and Passenger Traffic

Piermartini

Rousová

2008

SSRN Journal

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“…This means that the number of trade relationships of a given province depends only on the fraction of immigrants within the province itself. While there is general consensus on this (Herander and Saavedra, 2005;, the empirical consistency of such hypothesis for the Spanish test case is shown in Artal-Tur et al (2012), where the authors prove that the proximity (meant as geographical closeness) is key for the diffusion of the social capital and therefore for the expansion in the number of trade relationships abroad.…”

Section: Data Analysis On Aggregate Exports and Migrantsmentioning

confidence: 97%

Assessing the role of migration as trade-facilitator using the statistical mechanics of cooperative systems

et al. 2016

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Interactions between natives and foreign-born individuals may help to stimulate the development and the diversification of bilateral trade relationships. In fact, migrants act as trade facilitators reducing transaction costs in export activities and, consequently, more local firms are able to establish new trade relationships abroad. The pro-trade effect of migration is well evidenced in several works where the shape of the trade-migration relationship has been examined empirically; however, they all lack an analytical model that enables them to predict the expected non-linear relationship between migration and trade. Here, using statistical mechanics tools we develop a simple model that demonstrates that there is a positive non-linear relationship between the extensive margin of trade and the proportion of migrants in the total population. Data on Spanish trade and migration provide support for the predictions made by the theoretical model. The model also suggests the need of a critical mass of migrants before their interactions with the natives have any effective impact on trade. The threshold is sensitive to the nationality of the migrants, suggesting that cultural differences between natives and migrants may affect the number of migrants needed to generate a positive impact on trade. Furthermore, we examine the possible relationship between the share of migrants in the total population and the extent of diversification of the portfolio of exported goods, finding evidence of a strong positive correlation. Our approach can be used to examine other related issues such as the impact of formal or informal firm networks on trade.

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Exports and the Structure of Immigrant-Based Networks: The Role of Geographic Proximity

Cited by 167 publications

References 12 publications

On the pro-trade effects of immigrants

On the pro-trade effects of immigrants

Liberalization of Air Transport Services and Passenger Traffic

Assessing the role of migration as trade-facilitator using the statistical mechanics of cooperative systems

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