On the Pro-Trade Effects of Immigrants

Massimiliano Bratti, Luca De Benedictis () and Gianluca Santoni

No 347, Development Working Papers from Centro Studi Luca d'Agliano, University of Milano

Abstract: n this paper we investigate the causal effect of immigration on trade flows. We exploit the very favorable set-up offered by the Italian panel data — the fine geographical disaggregation (provinces, i.e., Nomenclature of territorial units for statistics 3 level — NUTS-3), the very high number of countries of origin of immigrants (‘super-diversity’), the high heterogeneity of social and economic characteristics of Italian provinces, and the absence of cultural (e.g. language) or historical (colonial ties) attractors for immigration to deal with the possible distortions generated by the choice of the areal unit (the so-called Modifiable Areal Unit Problem — MAUP), comparing estimates at the NUTS-2 and NUTS-3 geographical level; with unobserved heterogeneity, controlling for a wide set of fixed effects; with the endogeneity of immigrants\' location choices, using instruments based on immigrants\' enclaves. We find that immigrants have a significant positive effect on both exports and imports, much larger for the latter. The pro-trade effects of immigrants tend to decline in space, and even turn negative when large ethnic communities are located too far away from a specific province (via a trade-diversion effect). Finally, we give evidence of a substantial heterogeneity in the effects of immigrants: the impact on trade tends to be larger for immigrants coming from low-income countries, for earlier waves of immigrants and for the less advanced provinces of Southern Italy.

Keywords: Immigration; Trade; Gravity model; Super-diversity; MAUP; Transplanted-home bias effect; Business and social networks effects (search for similar items in EconPapers)
JEL-codes: F10 F14 F22 R10 (search for similar items in EconPapers)
Pages: 44
Date: 2012-11-13, Revised 2012-11-13
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)

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https://www.dagliano.unimi.it//media/WP2012_347.pdf (application/pdf)

Related works:
Journal Article: On the pro-trade effects of immigrants (2014)
Working Paper: On the pro-trade effects of immigrants (2013)
Working Paper: On the Pro-Trade Effects of Immigrants (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:csl:devewp:347

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