The Impact of Immigration on International Trade: A Meta-Analysis

36 Pages Posted: 4 Dec 2011

See all articles by Murat Gen

Murat Gen

affiliation not provided to SSRN

Masood Gheasi

VU University Amsterdam

Peter Nijkamp

VU University of Amsterdam - Department of Spatial Economics; Tinbergen Institute

Jacques Poot

Vrije Universiteit Amsterdam, Department of Spatial Economics; University of Waikato - National Institute of Demographic and Economic Analysis; Motu Economic and Public Policy Research; IZA Institute of Labor Economics

Abstract

Since the early 1990s many empirical studies have been conducted on the impact of international migration on international trade, predominantly from the host country perspective. Because most studies have adopted broadly the same specification, namely a log-linear gravity model of export and import flows augmented with the logarithm of the stock of immigrants from specific source countries as an additional explanatory variable, the resulting elasticities are broadly comparable and yield a set of estimates that is well suited to meta-analysis. We therefore compile and analyze in this paper the distribution of immigration elasticities of imports and exports across 48 studies that yielded 300 observations. The results show that immigration complements rather than substitutes for trade flows between host and origin countries. Correcting for heterogeneity and publication bias, an increase in the number of immigrants by 10 percent may be expected to increase the volume of trade on average by about 1.5 percent. However, the impact is lower for trade in homogeneous goods. Over time, the growing stock of immigrants decreases the elasticities. The estimates are affected by the choice of some covariates, the nature of the data (cross-section or panel) and the estimation technique. Elasticities vary between countries in ways that cannot be fully explained by study characteristics; trade restrictions and immigration policies matter for the impact of immigration on trade. The migrant elasticity of imports is larger than that of exports in about half the countries considered, but the publication bias and heterogeneity-corrected elasticity is slightly larger for exports than for imports.

Keywords: international trade, imports, exports, immigration, gravity model, meta-analysis

JEL Classification: F16, F22

Suggested Citation

Gen, Murat and Gheasi, Masood and Nijkamp, Peter and Poot, Jacques, The Impact of Immigration on International Trade: A Meta-Analysis. IZA Discussion Paper No. 6145, Available at SSRN: https://ssrn.com/abstract=1968096 or http://dx.doi.org/10.2139/ssrn.1968096

Murat Gen (Contact Author)

affiliation not provided to SSRN ( email )

Masood Gheasi

VU University Amsterdam ( email )

De Boelelaan 1105
Amsterdam, ND North Holland 1081 HV
Netherlands

Peter Nijkamp

VU University of Amsterdam - Department of Spatial Economics ( email )

De Boelelaan 1105
1081HV Amsterdam
Netherlands
+31 20 4446091 (Phone)
+31 20 4445611 (Fax)

Tinbergen Institute

Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands

Jacques Poot

Vrije Universiteit Amsterdam, Department of Spatial Economics ( email )

De Boelelaan 1105
1081HV Amsterdam
Netherlands

University of Waikato - National Institute of Demographic and Economic Analysis ( email )

Te Raupapa
Private Bag 3105
Hamilton, 3240
New Zealand

Motu Economic and Public Policy Research

Level 1, 93 Cuba Street
P.O. Box 24390
Wellington, 6142
New Zealand

IZA Institute of Labor Economics

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

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