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Information, Networks and Trust in the Global Economy - Essays on International Trade and Migration

Hatzigeorgiou, Andreas LU (2013) In Lund Economic Studies 174.
Abstract
This thesis investigates the role of migration in international trade within the framework of behind-the-border trade barriers and firm behavior. In addition to the introduction, which provides a context to the analysis, it consists of four essays. The first essay, titled ‘Migration as Trade Facilitation? Investigating the Links Between International Trade and Migration,’ examines the cross-country migration-trade link by estimating an augmented gravity model of international trade using a large data set that includes both developed and developing countries. The results suggest that bilateral migration is significantly related to increased trade. A ten percent increase in the total number of migrants is associated with an increase in... (More)
This thesis investigates the role of migration in international trade within the framework of behind-the-border trade barriers and firm behavior. In addition to the introduction, which provides a context to the analysis, it consists of four essays. The first essay, titled ‘Migration as Trade Facilitation? Investigating the Links Between International Trade and Migration,’ examines the cross-country migration-trade link by estimating an augmented gravity model of international trade using a large data set that includes both developed and developing countries. The results suggest that bilateral migration is significantly related to increased trade. A ten percent increase in the total number of migrants is associated with an increase in imports of 0.7-0.8 percent globally on average. The second essay, titled ‘Does Immigration Stimulate Foreign Trade? Evidence from Sweden,’ investigates whether the link between migration and increased trade can be substantiated for small and open economies. The study augments a gravity model of international trade to estimate the possible link based on trade and migration data for Sweden and 180 partner countries between 2002 and 2007. The results show a statistically significant and positive relationship between immigrant stocks and Swedish foreign trade to immigrant source countries. A ten percent increase in the total migrant stock from a specific country is associated with an approximately six percent increase in exports, on average, and approximately nine percent more imports. The third essay, titled ‘Immigration, Emigration and Integration – Evidence and Policy Implications,’ revisits the macro-relationship between trade and migration for Sweden with a focus on the mechanisms through which migration is assumed to facilitate trade. It also studies the role of labor market integration with respect to immigrants’ trade facilitating capacity, which is made possible by utilizing data on gender and age, and the role of different product margins of Sweden’s trade. The essay also identifies and exploits an instrument for immigrant stocks, which addresses potential endogeneity and allows inferences to be made concerning the direction of causation. The results confirm that migration has contributed to Sweden’s exports to immigrant source countries on an order of 3-4.5 percent given a ten percent increase in the immigrant stock. The findings suggest that labor market integration is important in determining the extent to which immigrants are able to reduce trade costs. The fourth essay, titled ‘Investigating the Link between Immigrant Employees and Firm Trade,’ studies the link between trade and migration at the firm level. It begins with a heterogeneous firm trade model and utilizes a matched employer-employee panel, which encompasses data for approximately 12,000 Swedish manufacturing firms, 600,000 fulltime employees and 176 partner countries over the years 1998-2000. In addition to providing microeconomic evidence, this essay examines the underlying channels through which migration is postulated to affect firms’ trade and the role of migrant characteristics in terms of skills and access to networks. It provides evidence on the existence of a significant and positive relationship between immigrant employees and firms’ foreign trade. Hiring one additional immigrant is associated with a 0.9 and 0.7 percent increase in the employer’s exports and imports, respectively, to (from) the immigrant source country. Immigrants’ skills and lengths of stay strongly influence the association with firm trade. In sum, the findings provided by the essays included in this thesis suggest that migration is not only an important trait of globalization in itself but also reinforces the process of economic interdependence through the reduction of barriers to international trade. (Less)
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author
supervisor
opponent
  • professor Egger, Peter, Department of Management, Technology and Economics, ETH Zürich
organization
publishing date
type
Thesis
publication status
published
subject
keywords
International trade, migration, gravity model, trade costs, networks, information, trust, trade policy
in
Lund Economic Studies
volume
174
pages
229 pages
publisher
Department of Economics, Lund Universtiy
defense location
EC3: 211
defense date
2013-10-23 10:15
ISBN
pdf 978-91-7473-602-1
tryck 978-91-7473-601-4
language
English
LU publication?
yes
id
873ad3ae-bb82-41f5-b518-6adba85dbb51 (old id 4025257)
date added to LUP
2013-09-30 16:24:45
date last changed
2016-09-19 08:45:07
@phdthesis{873ad3ae-bb82-41f5-b518-6adba85dbb51,
  abstract     = {This thesis investigates the role of migration in international trade within the framework of behind-the-border trade barriers and firm behavior. In addition to the introduction, which provides a context to the analysis, it consists of four essays. The first essay, titled ‘Migration as Trade Facilitation? Investigating the Links Between International Trade and Migration,’ examines the cross-country migration-trade link by estimating an augmented gravity model of international trade using a large data set that includes both developed and developing countries. The results suggest that bilateral migration is significantly related to increased trade. A ten percent increase in the total number of migrants is associated with an increase in imports of 0.7-0.8 percent globally on average. The second essay, titled ‘Does Immigration Stimulate Foreign Trade? Evidence from Sweden,’ investigates whether the link between migration and increased trade can be substantiated for small and open economies. The study augments a gravity model of international trade to estimate the possible link based on trade and migration data for Sweden and 180 partner countries between 2002 and 2007. The results show a statistically significant and positive relationship between immigrant stocks and Swedish foreign trade to immigrant source countries. A ten percent increase in the total migrant stock from a specific country is associated with an approximately six percent increase in exports, on average, and approximately nine percent more imports. The third essay, titled ‘Immigration, Emigration and Integration – Evidence and Policy Implications,’ revisits the macro-relationship between trade and migration for Sweden with a focus on the mechanisms through which migration is assumed to facilitate trade. It also studies the role of labor market integration with respect to immigrants’ trade facilitating capacity, which is made possible by utilizing data on gender and age, and the role of different product margins of Sweden’s trade. The essay also identifies and exploits an instrument for immigrant stocks, which addresses potential endogeneity and allows inferences to be made concerning the direction of causation. The results confirm that migration has contributed to Sweden’s exports to immigrant source countries on an order of 3-4.5 percent given a ten percent increase in the immigrant stock. The findings suggest that labor market integration is important in determining the extent to which immigrants are able to reduce trade costs. The fourth essay, titled ‘Investigating the Link between Immigrant Employees and Firm Trade,’ studies the link between trade and migration at the firm level. It begins with a heterogeneous firm trade model and utilizes a matched employer-employee panel, which encompasses data for approximately 12,000 Swedish manufacturing firms, 600,000 fulltime employees and 176 partner countries over the years 1998-2000. In addition to providing microeconomic evidence, this essay examines the underlying channels through which migration is postulated to affect firms’ trade and the role of migrant characteristics in terms of skills and access to networks. It provides evidence on the existence of a significant and positive relationship between immigrant employees and firms’ foreign trade. Hiring one additional immigrant is associated with a 0.9 and 0.7 percent increase in the employer’s exports and imports, respectively, to (from) the immigrant source country. Immigrants’ skills and lengths of stay strongly influence the association with firm trade. In sum, the findings provided by the essays included in this thesis suggest that migration is not only an important trait of globalization in itself but also reinforces the process of economic interdependence through the reduction of barriers to international trade.},
  author       = {Hatzigeorgiou, Andreas},
  isbn         = {pdf 978-91-7473-602-1},
  keyword      = {International trade,migration,gravity model,trade costs,networks,information,trust,trade policy},
  language     = {eng},
  pages        = {229},
  publisher    = {Department of Economics, Lund Universtiy},
  school       = {Lund University},
  series       = {Lund Economic Studies},
  title        = {Information, Networks and Trust in the Global Economy - Essays on International Trade and Migration},
  volume       = {174},
  year         = {2013},
}