How Localized is the Pro-trade Effect of Immigration? Evidence from Mexico and the United States

Michael Good ()
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Michael Good: Department of Economics, Florida International University

No 1203, Working Papers from Florida International University, Department of Economics

Abstract: I estimate the effect that immigrants have on international trade between states of current residence and states of origin. The pro-trade effect of immigrants has been thoroughly examined since the mid-1990s, connecting both destination countries with origin countries and destination sub-national divisions with origin countries, respectively. However, a recent emphasis on the importance of geographic proximity to the immigration-trade link leads me to pose the question of how localized the trade-enhancing effect of immigrants actually may be. In turn, my analysis provides the ?rst results as to the immigrant-trade nexus at the state level for both places of destination and origin, relying on a unique data set allowing the mapping of Mexican-born immigrants?US states of residence to Mexican states of origin. I ?nd that immigrants indeed promote trade between their US states of residence and Mexican states of origin, estimating a statistically signi?cant elasticity of exports to immigration equal to 0.08. This ?gure is not only qualitatively but also quantitatively important, corresponding to $2467 extra annual exports between respective US and Mexican states associated with each additional immigrant.

Pages: 34 pages
Date: 2012-10
New Economics Papers: this item is included in nep-dev, nep-int and nep-mig
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https://economics.fiu.edu/research/pdfs/2012_working_papers/1203.pdf First version, 2012 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:fiu:wpaper:1203

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