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Trade, Migration and Integration: Evidence and Policy Implications
Örebro University, Örebro University School of Business. Lunds universitet.
Örebro University, Swedish Business School at Örebro University.ORCID iD: 0000-0003-0149-9598
(English)Manuscript (preprint) (Other academic)
Abstract [en]

This paper takes departure in the unique position taken bySwedish policymakers recently in giving explicit emphasis to migration as a tool for increasing trade. We attempt to put this positionto empirical scrutiny.Our results demonstrate thatmigrants spur exports, especially along the extensive product margin of trade and for differentiated products, but with no significant impact on imports. This suggests that for small open economies with many immigrants being refugees, the aim 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 usto draw inferences on the underlying impact channels. We adoptan instrumental variable approach to address the endogeneity issue due to potential reverse causality. The pattern of results is consistent with the hypothesis that migration mainly reducesfixed trade costs derived from information and trust friction across migrant host and source countries. Importantly, the results imply that policymakers may be able to promote tradeby improvingimmigrants’ labor market integrationrather than being restricted to more liberal immigration policies, which is generally more controversial.

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-37656OAI: oai:DiVA.org:oru-37656DiVA: diva2:753856
Available from: 2014-10-09 Created: 2014-10-09 Last updated: 2017-10-17Bibliographically approved

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http://www.oru.se/Extern/Institutioner/HH/Forskning/Working_Papers/WP%205%202014.pdf

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Hatzigeorgiou, AndreasLodefalk, Magnus
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Örebro University School of BusinessSwedish Business School at Örebro University
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