Migration and Trade
Maximilian Von Ehrlich
Ludwig-Maximilians-Universität Munich - Center for Economic Studies (CES)
Tulane University - Department of Economics
May 31, 2011
CESifo Working Paper Series No. 3467
Theoretical and empirical research in economics suggests that bilateral migration triggers bilateral trade through a number of channels. This paper assesses the functional form of the impact of migration on trade flows in a quasi-experimental setting. We provide evidence that the relationship is not log-linear. In particular, at small levels of migration (stocks) the elasticity of trade to migration is quite high, and it declines to zero at about 4,000 immigrants. If migration stocks exceed such a level, the evidence suggests that trade will not increase anymore. This suggests that cross-country network and other effects flowing from migration materialize at relatively low levels of migration, but there appears to be satiation as immigrant numbers increase by much.
Number of Pages in PDF File: 34
Keywords: migration, bilateral trade, quasi-randomized experiment, generalized propensity score estimation
JEL Classification: C210, F140, F220working papers series
Date posted: June 1, 2011
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