Immigration, Information, and Trade Margins

Shan (Victor) Jiang
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Shan (Victor) Jiang: University of Calgary

No 2007-16, Working Papers from Department of Economics, University of Calgary

Abstract: Recent theories suggest that better information in destination countries could reduce firm’s fixed export costs,lower uncertaintyo f trade policy responses,and improve policy making processes.To identify the relation betweeninformation and fixed export costs,I investigate how information, measured by immigration, affects extensive and intensive margins.The theoretical model predicts that higher fixed export costs reduce trade along the extensive margin,and higher variable export costs lower trade along both margins.Using a gravity model of Canada’s trade data with 125 partners over 1988-2004,I find immigrant stocks residing in Canada mainly affect the extensive margin rather than the intensive margin.This is evidence that information primarily affects fixed export costs.

JEL-codes: C13 C32 F12 F16 F22 (search for similar items in EconPapers)
Pages: 33
Date: 2007-10-31
New Economics Papers: this item is included in nep-int and nep-mig
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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