Trade and Migration: Firm-Level Evidence (LONG VERSION)

Arbeitspapier

Migration has been associated with higher levels of trade. Previous studies interpret this as evidence of migrants' ability to lower trade costs. Nevertheless, no study has investigated the impact of migrants on firms' foreign trade. Thus, they fail to both provide evidence on the role that migrants may play in lowering firms' trade costs, and exactly through which mechanisms the impact is derived. This study, being the first to study in depth the impact of immigration on trade at the firm level, bridges this gap in research. It utilizes new and unique employer-employee data for 12,000 Swedish firms, for the period 1998-2007, in a firm-level gravity framework. It provides novel firm-level evidence, demonstrating a significant, positive, and robust impact of immigrants in raising firms' foreign trade. Migrants are found to increase trade both on the extensive and intensive product margin. Further, the study is able to conclude that the sustained effect mainly derives from lower information frictions through superior knowledge of foreign-markets, although contacts are also important.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 6/2011

Classification and Topics

• Classification: Wirtschaft ; Firm Behavior: Empirical Analysis ; Search; Learning; Information and Knowledge; Communication; Belief; Unawareness ; Empirical Studies of Trade ; International Migration
• Subject: trade costs ; information ; trust ; migration ; heterogeneous firms ; gravity ; firmlevel data ; product margins

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hatzigeorgiou, Andreas ; Lodefalk, Magnus
• Event: Veröffentlichung
• (who): Örebro University School of Business
• (where): Örebro
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/244474
• Last update: 10.03.2025, 11:44 AM CET