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Trade, Migration and Integration: Evidence and Policy Implications
Stockholm Chamber of Commerce and The Ratio Institute, Stockholm, Sweden.
Örebro University, Swedish Business School at Örebro University. National Board of Trade, Stockholm, Sweden.ORCID iD: 0000-0003-0149-9598
2015 (English)In: The World Economy, ISSN 0378-5920, E-ISSN 1467-9701, Vol. 38, no 12, 2013-2048 p.Article in journal (Refereed) Published
Abstract [en]

This paper takes as its point of departure the unique position recently adopted by Swedish policymakers emphasizing migration as a tool to increase trade. We attempt to empirically scrutinize this position. Our results demonstrate that migrants stimulate exports, especially along the extensive product margin of trade and for differentiated products, but have no significant impact on imports. This finding suggests that for small open economies where numerous immigrants are refugees, the strategy of using migration to facilitate trade may only be effective with respect to exports. This paper also contributes to the literature on trade and migration by exploiting data on gender and age, which allow us to draw inferences on the underlying impact channels. We adopt an instrumental variable approach to address the endogeneity issue due to potential reverse causality. The pattern of results is consistent with the hypothesis that migration primarily reduces fixed trade costs resulting from information and trust friction across migrant host and source countries. Importantly, the results imply that policymakers may be able to promote trade by improving immigrants’ labor market integration instead of simply being restricted to promoting more liberal immigration policies, which is generally more controversial.

Place, publisher, year, edition, pages
Wiley-Blackwell, 2015. Vol. 38, no 12, 2013-2048 p.
Keyword [en]
Trade, migration, gravity model, trade costs, networks, information, trust, trade policy
National Category
Economics
Research subject
Economics
Identifiers
URN: urn:nbn:se:oru:diva-37654DOI: 10.1111/twec.12236ISI: 000368262800008Scopus ID: 2-s2.0-84955203486OAI: oai:DiVA.org:oru-37654DiVA: diva2:753847
Available from: 2014-10-09 Created: 2014-10-09 Last updated: 2016-02-11Bibliographically approved

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Hatzigeorgiou, AndreasLodefalk, Magnus
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CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf