Migration and Trade during the Belle Époque in Argentina (1870-1913)

Giuseppe De Arcangelis, Rama Dasi Mariani () and Federico Nastasi ()
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Rama Dasi Mariani: CEIS, University of Rome Tor Vergata; Department of Social Sciences and Economics, Sapienza University of Rome
Federico Nastasi: Department of Social Sciences and Economics, Sapienza University of Rom

No 11/20, Working Papers from Sapienza University of Rome, DISS

Abstract: Between 1870 to 1914 the Argentine economy performed spectacularly with a yearly average real growth rate of 5.94 per cent. Increased resource endowment in both land and labor, via migration, and openness to trade have been considered the two main drivers of this success. In this paper we underline the central role of Argentine immigration in contributing not only to increase resource endowments, but also to lower trade costs boosting exports and imports. By considering Argentine bilateral trade and migration from eight European countries (Austro-Hungarian Empire, Belgium, France, Germany, Italy, Spain, Switzerland and United Kingdom) we use a migration-augmented gravity model to estimate the contribution of the massive inflows of Europeans. In particular, we find that the main pro-trade effect was on imports: an increase of 10 per cent of migrants from one country could increase imports up to 8 per cent from the same trade partner. To overcome the typical endogeneity problem our study proposes migration to the US from the same countries as a instruments that could capture the same push (but not Argentine pull) factors triggering European out-migration.

Keywords: Gravity Model; Migration and Imports; China-shock based Instrumental Variable (search for similar items in EconPapers)
JEL-codes: F22 N76 (search for similar items in EconPapers)
Date: 2020-06
New Economics Papers: this item is included in nep-his, nep-int and nep-mig
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