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Immigrant Entrepreneurs, Diasporas and Exports

Massimiliano Bratti, Luca De Benedictis () and Gianluca Santoni ()
Additional contact information
Luca De Benedictis: University of Macerata

No 11280, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: In this paper we highlight a new complementary channel to the business and social network effect à la Rauch (2001) through which immigrants generate increased export flows from the regions in which they settle to their countries of origin: they can become entrepreneurs. Using very small-scale (NUTS-3) administrative data on immigrants' location in Italy, the local presence of immigrant entrepreneurs (i.e. firms owned by foreign-born entrepreneurs) in the manufacturing sector, and on trade flows in manufacturing between Italian provinces and more than 200 foreign countries, we assess the causal relationship going from diasporas and immigrant entrepreneurs towards export flows. Both the size of the diaspora and the number of immigrant entrepreneurs have a positive, significant and economically meaningful effect on exports. We find that increasing the stock of (non-entrepreneur) immigrants by 10% would lead to a 1.7% increase in exports in manufacturing towards immigrants' countries of origin, while increasing the number of immigrant entrepreneurs in manufacturing by 10% would raise exports by about 0.6%. We also show that, besides these bilateral effects, the population of immigrant entrepreneurs raises a province's overall competitiveness and export flows towards all potential destinations.

Keywords: exports; immigrants; gravity model; immigrant entrepreneurs; Italy (search for similar items in EconPapers)
JEL-codes: F10 F14 F22 R10 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ent, nep-eur, nep-int, nep-mig and nep-sbm
Date: 2018-01
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Related works:
Working Paper: Immigrant entrepreneurs, diasporas and exports (2018) Downloads
Working Paper: Immigrant entrepreneurs, diasporas and exports (2018) Downloads
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