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- W2474920297 abstract "A link between immigration, imports, and exports has been found by a number of papers that have used the gravity equation to analyze bilateral trade patterns. We discuss what this research implies about the mechanisms through which immigrants expand trade and identify strengths and weakness of the various approaches. This paper also contributes to this literature by estimating immigrant effects for Canada using cross-province variation in international trade and immigration patterns. We derive an alternative functional form capturing the relationship between immigration and trade based on the proposition that immigrants use their connections and superior ‘market intelligence’ to exploit trade opportunities that non-immigrants do not access. We find that the average new immigrant expands exports to his=her native country by $312 and expands imports by $944. The gravity model of international trade has consistently revealed a strong association between immigration and trade. Not only have different studies revealed a robust relationship for different samples and specifications, the strength of the immigration effect varies in sensible ways for different trading partners, products, and types of immigrants. The estimated magnitude of the immigration effect, however, differs greatly across studies. The analysis of Head and Ries (1998), Dunlevy and Hutchinson (1999, 2001), Rauch and Trindade (2002), Girma and Yu (2002) and Combes et al. (2002) based on cross-sectional information find large effects whereas Gould’s (1994) estimation based on times series variation indicates smaller effects. The discrepancy from an econometric standpoint is easy to explain—cross-sectional estimates may be upwardly biased due to unobserved characteristics of trading relationships whereas fixed effect estimates may have the opposite bias due to the magnification of measurement error caused by this technique. Alternative explanations for the discrepancy are differences in specifications and samples." @default.
- W2474920297 created "2016-07-22" @default.
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- W2474920297 date "2002-01-01" @default.
- W2474920297 modified "2023-09-27" @default.
- W2474920297 title "IMMIGRATION A ND T HE T RADE O F PROVINCES" @default.
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