Isolating the Network Effect of Immigrants on Trade

Mariya Aleksynska and Giovanni Peri

No 6941, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Within the migration-trade nexus literature, this paper proposes a more carefully defined measure of migration business networks, and quantifies its impact on bilateral trade. Using cross-sectional data and controlling for the overall bilateral stock of migrants, the share of migrants employed in managerial/business-related occupations has a strong additional effect on trade, and especially on exports. Those immigrants should be the ones directly involved in the diffusion and transmission of information relevant for companies trading with other countries. Their presence is found to increase the volume of trade beyond the already known effect of immigrants or highly educated immigrants. When we control for the presence of highly educated immigrants, the share of immigrants in business network occupations shows a particularly large effect on trade in differentiated goods. Specifically, we find that highly educated individuals in business-related occupations are those contributing to export by the largest margin. Business network effects seem particularly important in stimulating exports to culturally different countries, such as those with different legal origin.

Keywords: business networks; international trade; migration; differentiated goods (search for similar items in EconPapers)
JEL-codes: F14 F16 F22 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2012-10
New Economics Papers: this item is included in nep-int, nep-mig and nep-net
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

Published - published in: World Economy, 2014, 37 (3), 434 - 455

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Related works:
Journal Article: Isolating the Network Effect of Immigrants on Trade (2014)
Working Paper: Isolating the Network Effect of Immigrants on Trade (2011)
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