On the Pro-Trade Effects of Immigrants

44 Pages Posted: 14 Feb 2013

See all articles by Massimiliano Bratti

Massimiliano Bratti

Università degli Studi di Milano - DEAS; Institute for the Study of Labor (IZA)

Luca De Benedictis

University of Macerata; Luiss University

Gianluca Santoni

St. Anna School of Advanced Studies - Laboratory of Economics and Management (LEM)

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Date Written: November 1, 2012

Abstract

In this paper we investigate the causal effect of immigration on tradeflows. We exploit the very favorable set-up offered by the Italian panel data — the fine geographical disaggregation (provinces, i.e., Nomenclature of territorial units for statistics 3 level l — NUTS-3), the very high number of countries of origin of immigrants (‘super-diversity’), the high heterogeneity of social and economic characteristics of Italian provinces, and the absence of cultural (e.g. language) or historical (colonial ties) attractors for immigration — to deal with the possible distortions generated by the choice of the areal unit (the so-called Modifiable Areal Unit Problem — MAUP), comparing estimates at the NUTS-2 and NUTS-3 geographical level; with unobserved heterogeneity, controlling for a wide set of fixed effects; with the endogeneity of immigrants’ location choices, using instruments based on immigrants’ enclaves. We find that immigrants have a significant positive effect on both exports and imports, much larger for the latter. The pro-trade effects of immigrants tend to decline in space, and even turn negative when large ethnic communities are located too far away from a specific province (via a trade-diversion effect). Finally, we give evidence of a substantial heterogeneity in the effects of immigrants: the impact on trade tends to be larger for immigrants coming from low-income countries, for earlier waves of immigrants and for the less advanced provinces of Southern Italy.

Keywords: Immigration, Trade, Gravity model, Super-diversity, MAUP, Transplanted-home bias effect

JEL Classification: F10, F14, F22, R10

Suggested Citation

Bratti, Massimiliano and De Benedictis, Luca and Santoni, Gianluca, On the Pro-Trade Effects of Immigrants (November 1, 2012). Centro Studi Luca d'Agliano Development Studies Working Paper No. 347, Available at SSRN: https://ssrn.com/abstract=2215695 or http://dx.doi.org/10.2139/ssrn.2215695

Massimiliano Bratti (Contact Author)

Università degli Studi di Milano - DEAS ( email )

Via Conservatorio, 7
I-20122 Milano
Italy

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

Luca De Benedictis

University of Macerata ( email )

Via Crescimbeni 20
Macerata, MC 62100
Italy

HOME PAGE: http://docenti.unimc.it/luca.debenedictis

Luiss University ( email )

Viale Romania 32
Rome, 00198
Italy

Gianluca Santoni

St. Anna School of Advanced Studies - Laboratory of Economics and Management (LEM) ( email )

Piazza Martiri della Liberta', 33
Pisa, I-56127
Italy

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