Can Immigrants Hurt Trade?

Tomas Konecny

CERGE-EI Working Papers from The Center for Economic Research and Graduate Education - Economics Institute, Prague

Abstract: This paper estimates the impact of immigrant network spillovers on international trade. Contrary to previous studies focusing mostly on the trade enhancing role of immigrant networks, the present framework allows for potential trade diverting effects. A simple matching model that incorporates both trade creation and diversion channels furthermore points at the importance of relative as opposed to absolute measures of immigrant networks. Using a new dataset of 19 OECD countries, I find that while immigrant networks indeed facilitate exports from host to source country, they simultaneously hurt trade with the host country’s other trading partners. In addition, I find that the impact of information-related trade barriers might be negatively related to the economic size of the trading partner. In particular, the larger the trading partner, the smaller the trade benefits of lower information costs due to a shared common language.

Keywords: International trade; immigration; informal trade barriers. (search for similar items in EconPapers)
JEL-codes: F22 O24 (search for similar items in EconPapers)
Date: 2007-05
New Economics Papers: this item is included in nep-int and nep-mig
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:cer:papers:wp329

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