How Do Immigrants Promote Exports? Networks, Knowledge, Diversity

58 Pages Posted: 21 Sep 2021

See all articles by Gianluca Orefice

Gianluca Orefice

World Trade Organization (WTO)

Hillel Rapoport

Paris School of Economics (PSE)

Gianluca Santoni

Centre d'Etudes Prospectives et d'Info. Internationales (CEPII)

Date Written: 2021

Abstract

How does immigration affect export performance? To answer this question we propose a unified empirical framework allowing to disentangle various mechanisms such as the role of networks in reducing bilateral transaction costs as well as productivity shifts arising from migration-induced knowledge diffusion and increased workforce diversity. While we find evidence supporting all three channels (at both the intensive and the extensive margins of trade), our framework allows to gauge their relative importance. We then focus on diversity and find stronger results in sectors characterized by more complex production processes and more intense teamwork cooperation. This is consistent with theories linking the distribution of skills to the comparative advantage of nations. The results are robust to using a theoretically-grounded IV approach combining three variations on the shift share methodology.

Keywords: international trade, birthplace diversity, migration, productivity

JEL Classification: F140, F160, F220, O470

Suggested Citation

Orefice, Gianluca and Rapoport, Hillel and Santoni, Gianluca, How Do Immigrants Promote Exports? Networks, Knowledge, Diversity (2021). CESifo Working Paper No. 9288, Available at SSRN: https://ssrn.com/abstract=3925320 or http://dx.doi.org/10.2139/ssrn.3925320

Gianluca Orefice (Contact Author)

World Trade Organization (WTO) ( email )

Rue de Lausanne 154
Geneva 21, CH-1211
Switzerland

Hillel Rapoport

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

Gianluca Santoni

Centre d'Etudes Prospectives et d'Info. Internationales (CEPII) ( email )

9 rue Georges Pitard
Paris Cedex 15, F-75015
France

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