The trade-creating effects of business and social networks: evidence from France

Combes, Pierre-Philippe; Lafourcade, Miren; Mayer, Thierry

doi:10.1016/j.jinteco.2004.07.003

Cited by 394 publications

(421 citation statements)

References 37 publications

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“…This dataset provides data on cross border investments in equity, long term change in the number of country pairs. 6 Part of the increase in lending-borrowing country pairs in the 1990s is due to new countries that were formed in the 1990s and part is due to a rise in the volume of international loans. In this respect, the migration stock in 1990 can be regarded as a predetermined variable for country pairs that had no lending activity in the 1980s and started to lend in the 1990s.…”

Section: Datamentioning

confidence: 99%

Migration and Cross-Border Financial Flows

Kügler

Levintal²,

Rapoport

2017

The World Bank Economic Review

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. The gravity model has provided a tractable empirical framework to account for bilateral flows not only of manufactured goods, as in the case of merchandise trade, but also of financial flows. In particular, recent literature has emphasized the role of information costs in preventing larger diversification of financial investments. This paper investigates the role of migration in alleviating information imperfections between home and host countries. We show that the impact of migration on financial flows is strongest where information problems are more acute (that is, for more informational sensitive investments and between more culturally distant countries) and for the type of migrants that are most able to enhance the flow of information, namely, skilled migrants. We interpret these differential effects as additional evidence pointing to the role of information in generating home-bias and as new evidence of the role of migration in reducing information frictions between countries.JEL Classification: F21, F22, O1

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Section: Datamentioning

confidence: 99%

Migration and Cross-Border Financial Flows

Kügler

Levintal²,

Rapoport

2017

The World Bank Economic Review

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“…For example, countries which share a common language or had colonial links should trade more: the data confirm his argument. Combes et al (2005) also provide some insights about the informational content of trade costs using French data. Anderson and Marcouiller (1999) show the importance of the contractual environment and find that "trade is reduced in response to hidden transaction costs associated with the insecurity of international exchange and a lack of contract enforcement.…”

Section: Theoretical Backgroundmentioning

confidence: 99%

The geography of trade in goods and asset holdings

Aviat¹,

Coeurdacier²

2007

Journal of International Economics

315

319

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Gravity models have been widely used to describe bilateral trade in goods. Portes and Rey [Portes, R., Rey, H., 2005. The Determinants of Cross-Border Equity Flows. Journal of International Economics, 65(2), 269-296.] applied this framework to cross-border equity flows and found that distance, which proxies information asymmetries, is a surprisingly very large barrier to cross-border asset trade. We adopt a different point of view and explore the complementarity between bilateral trade in goods and bilateral asset holdings in a simultaneous gravity equations framework. Providing different instruments for both endogenous variables, we show that a 10% increase in bilateral trade raises bilateral asset holdings by 6% to 7%. The reverse causality is also significant, albeit smaller. Controlling for trade, the impact of distance on asset holdings is drastically reduced.

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“…I describe this model briefly and add a simple term a ij for preferences between countries. This procedure is in keeping with Combes et al (2005), where a weight is introduced in order to describe bilateral preferences between countries. This term means that preferences can be captured in both directions, from the immigrant's home country to host country and vice versa.…”

Section: Trade Modelmentioning

confidence: 99%

Market structure and the link between migration and trade

Tai

2009

Rev World Econ

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Many recent studies have looked at the impact of international migration on trade and found a significant effect. They posit that migration fosters trade by lowering costs or by means of a preference bias. However, to my knowledge, market structure has not as yet been considered. Using data from Switzerland, this paper empirically assesses the extent to which migration affects trade, taking goods differentiation into account. A monopolistic model with a multisector economy (Chaney in Am Econ Rev 98(41): [1707][1708][1709][1710][1711][1712][1713][1714][1715][1716][1717][1718][1719][1720][1721] 2008) is then empirically estimated. The findings show that market structure explains the different channels through which migration affects trade.

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The trade-creating effects of business and social networks: evidence from France

Cited by 394 publications

References 37 publications

Migration and Cross-Border Financial Flows

Migration and Cross-Border Financial Flows

The geography of trade in goods and asset holdings

Market structure and the link between migration and trade

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