The Impact of Immigration on Portuguese Intra-Industry Trade

Nuno Carlos Leitao

No 146627, Economy and Society from Fondazione Eni Enrico Mattei (FEEM)

Abstract: This paper investigates the relationship between intra-industry trade (IIT) and immigration flows using a gravity model for the period 2000-2010 between Portugal and European Union’s Member States (EU-27). The present study uses the methodology of Kandogan (2003) for separating IIT into its components horizontal (HIIT) and vertical intra-industry trade (VIIT). Using a panel data approach, our study find that immigration has a positive influence on Portuguese intra-industry trade. These results indicate that the immigration can reduce transaction costs between home and host country. We also consider in econometric model, the economic dimension which appears to exercise a positive effect on IIT. Our results confirm the hypothesis that there is a negative effect of transportation costs on trade.

Keywords: Labor; and; Human; Capital (search for similar items in EconPapers)
Pages: 20
Date: 2013-02
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Persistent link: https://EconPapers.repec.org/RePEc:ags:feemso:146627

DOI: 10.22004/ag.econ.146627

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