Cross-Border Product Adoption: Individual Imports, Migrant Networks, and Domestic Retailers

David Argente, Esteban Méndez and Diana Van Patten

No 35104, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper studies how new varieties enter markets and become locally available. We provide causal evidence of demand externalities that operate in two steps. First, information about new varieties diffuses directly through real-world social ties among consumers. Second, early purchases generate an indirect spillover to firms: local retailers learn from "pioneer'' consumers which new varieties are most likely to succeed and adjust their product offerings accordingly. We study this process in the context of direct-to-consumer imports. Using customs records on individuals' purchases matched to population-wide social networks, international migrant links, and retailer catchment areas, we document economically meaningful demand externalities. Product-specific demand shocks abroad transmit through migrant networks and shift which varieties consumers purchase. Leveraging these shocks as a plausibly exogenous source of local demand variation, we show strong peer effects: prior purchases by close neighbors, coworkers, or friends increase an individual’s likelihood of purchasing the same variety, especially for premium and visible goods. We leverage this result to identify an indirect spillover from consumers to firms: retailers are more likely to add a variety when it becomes popular among consumers in their catchment area. Combining the instrument with linked consumer--retailer data and a self-conducted retailer survey, we show that this response reflects learning about latent demand for varieties not yet stocked locally. Together, social diffusion and retailer learning generate demand multipliers that reshape local product availability and expand access to global variety.

JEL-codes: D22 D8 E02 F1 F14 F15 F6 L2 O1 O12 O3 O30 O47 (search for similar items in EconPapers)
Date: 2026-04
New Economics Papers: this item is included in nep-bec, nep-mig and nep-net
Note: DEV EFG IFM IO ITI PR
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