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Do migrants really foster trade ? the trade-migration nexus, a panel approach 1960-2000
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Do migrants really foster trade ? the trade-migration nexus, a panel approach 1960-2000

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  • Parsons, Christopher R.

Abstract

Despite the burgeoning empirical literature providing evidence of a strong and robust positive correlation between trade and migration, doubts persist as to unobserved factors which may be driving this relationship. This paper re-examines the trade-migration nexus using a panel spanning several decades, which comprises the majority of world trade and migration in every decade. First the findings common to the literature are reproduced. Country-pair fixed effects are then used to account for unobserved bilateral factors, the implementation of which removes all of the positive impact of migration on trade. In other words the unobserved factors, a leading candidate for which it is argued is international bilateral ties, are on average strongly and positively correlated with migrant networks. Dividing the world into the relatively affluent North and poorer South, the results show that migrants from either region only affect Northern exports to the South. This is intuitive since in general countries of the North export more differentiated products and information barriers between these regions are greatest. A country-level analysis further shows that migrants may both create and divert trade. Taken as a whole, the results demonstrate the large biases inherent in cross-sectional studies investigating the trade-migration nexus and highlight the extent to which previous results have been overstated.

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  • Parsons, Christopher R., 2012. "Do migrants really foster trade ? the trade-migration nexus, a panel approach 1960-2000," Policy Research Working Paper Series 6034, The World Bank.
    • Handle: RePEc:wbk:wbrwps:6034
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    Cited by:

    1. Mariya Aleksynska & Giovanni Peri, 2014. "Isolating the Network Effect of Immigrants on Trade," The World Economy, Wiley Blackwell, vol. 37(3), pages 434-455, March.
    2. Jonathan Timmis, 2012. "The Internet and International Trade in Goods," Discussion Papers 12/08, University of Nottingham, GEP.
    3. Egger, Peter H. & Ehrlich, Maximilian v. & Nelson, Douglas R., 2020. "The trade effects of skilled versus unskilled migration," Journal of Comparative Economics, Elsevier, vol. 48(2), pages 448-464.
    4. Hélène Ehrhart & Maëlan Le Goff & Emmanuel Rocher & Raju Jan Singh, 2012. "Does Migration Foster Exports? An African Perspective," Working Papers 2012-38, CEPII research center.
    5. Behncke, Nadine, 2014. "The structure of ethnic networks and exports: Evidence from Germany," University of Göttingen Working Papers in Economics 198, University of Goettingen, Department of Economics.
    6. Murat Genc & Masood Gheasi & Peter Nijkamp & Jacques Poot, 2012. "The impact of immigration on international trade: a meta-analysis," Chapters, in: Peter Nijkamp & Jacques Poot & Mediha Sahin (ed.), Migration Impact Assessment, chapter 9, pages 301-337, Edward Elgar Publishing.
    7. Lücke, Matthias & Stöhr, Tobias, 2015. "Heterogeneous immigrants and foreign direct investment: The role of language skills," Kiel Working Papers 2009, Kiel Institute for the World Economy (IfW Kiel).
    8. Ernest Miguelez & Carsten Fink, 2013. "Measuring the International Mobility of Inventors: A New Database," WIPO Economic Research Working Papers 08, World Intellectual Property Organization - Economics and Statistics Division, revised May 2013.
    9. Bellino Antonella & Celi Giuseppe, 2016. "The Role of Migration in the Variety and Quality of Trade: Evidence from Germany," German Economic Review, De Gruyter, vol. 17(1), pages 1-25, February.
    10. Felbermayr, Gabriel & Grossmann, Volker & Kohler, Wilhelm, 2012. "Migration, International Trade and Capital Formation: Cause or Effect ?," FSES Working Papers 436, Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland.
    11. Anna Minasyan & Peter Nunnenkamp, 2016. "Remittances and the Effectiveness of Foreign Aid," Review of Development Economics, Wiley Blackwell, vol. 20(3), pages 681-701, August.
    12. Lanati, Mauro & Thiele, Rainer, 2018. "The impact of foreign aid on migration revisited," World Development, Elsevier, vol. 111(C), pages 59-74.
    13. Petrit Gashi & Mehtap Hisarciklilar & Geoffrey Pugh, 2017. "Kosovo – EU trade relations: a dynamic panel poisson approach," Applied Economics, Taylor & Francis Journals, vol. 49(27), pages 2642-2654, June.
    14. Marcus H. Böhme & Sarah Kups, 2017. "The economic effects of labour immigration in developing countries: A literature review," OECD Development Centre Working Papers 335, OECD Publishing.
    15. Ehrhart, Helene & Le Goff, Maelan & Rocher?, Emmanuel & Singh, Raju Jan, 2014. "Does migration foster exports ? evidence from Africa," Policy Research Working Paper Series 6739, The World Bank.
    16. Selim Çagatay & Murat Genç & Onur Koska, 2013. "The Impact of Immigration on International Trade in Europe: The Case of the EU-Mediterranean-Eastern Europe Zone," ERSA conference papers ersa13p376, European Regional Science Association.
    17. Anna D’Ambrosio & Sandro Montresor, 2022. "The pro-export effect of subnational migration networks: new evidence from Spanish provinces," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 158(1), pages 53-107, February.
    18. repec:wip:wpaper:8 is not listed on IDEAS
    19. Jonathan Timmis, 2012. "The Internet and International Trade in Goods," Discussion Papers 12/03, University of Nottingham, School of Economics.

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    Free Trade; Economic Theory&Research; Trade Law; Trade Policy; Emerging Markets;
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