Isolating the Network Effect of Immigrants on Trade

31 Pages Posted: 27 Oct 2012

See all articles by Mariya Aleksynska

Mariya Aleksynska

IZA

Giovanni Peri

University of California, Davis - Department of Economics

Date Written: October 27, 2012

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: migration, international trade, business networks, differentiated goods

JEL Classification: F14, F16, F22

Suggested Citation

Aleksynska, Mariya and Peri, Giovanni, Isolating the Network Effect of Immigrants on Trade (October 27, 2012). IZA Discussion Paper No. 6941. Available at SSRN: https://ssrn.com/abstract=2167563

Giovanni Peri

University of California, Davis - Department of Economics ( email )

One Shields Drive
Davis, CA 95616-8578
United States
530-752-3033 (Phone)
530-752-9382 (Fax)

Register to save articles to
your library

Register

Paper statistics

Downloads
36
Abstract Views
302
PlumX Metrics