Trade and Migration: Firm-Level Evidence (LONG VERSION)

Andreas Hatzigeorgiou () and Magnus Lodefalk
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Andreas Hatzigeorgiou: Department of Economics, Lund University.

No 2011:6, Working Papers from Örebro University, School of Business

Abstract: Migration has been associated with higher levels of trade. Previous studies interpret this as evidence of migrants’ ability to lower trade costs. Nevertheless, no study has investigated the impact of migrants on firms’ foreign trade. Thus, they fail to both provide evidence on the role that migrants may play in lowering firms’ trade costs, and exactly through which mechanisms the impact is derived. This study, being the first to study in depth the impact of immigration on trade at the firm level, bridges this gap in research. It utilizes new and unique employer-employee data for 12,000 Swedish firms, for the period 1998-2007, in a firm-level gravity framework. It provides novel firm-level evidence, demonstrating a significant, positive, and robust impact of immigrants in raising firms’ foreign trade. Migrants are found to increase trade both on the extensive and intensive product margin. Further, the study is able to conclude that the sustained effect mainly derives from lower information frictions through superior knowledge of foreign-markets, although contacts are also important.

Keywords: trade costs; information; trust; migration; heterogeneous firms; gravity; firmlevel data; product margins (search for similar items in EconPapers)
JEL-codes: D22 D83 F14 F22 (search for similar items in EconPapers)
Pages: 87 pages
Date: 2011-12-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Published as Hatzigeorgiou, Andreas and Magnus Lodefalk, 'Migrants' Influence on Firm-Level Exports' in Journal of Industry, Competition and Trade, 2016, pages 1-21.

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Related works:
Working Paper: Trade and Migration: Firm-Level Evidence (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:oruesi:2011_006

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