The effects of refugee and non-refugee immigrants on US trade with their home countries

Employing data on US immigrants and trade with 59 home countries for the years 1996–2001, we compare the extent to which refugee and non-refugee immigrants affect US trade with their home countries and provide the first evidence of variation in the US immigrant–trade relationship across immigrant types. We also consider the abilities of refugee and non-refugee immigrants to offset the trade-inhibiting influence of cultural distance. Our results show that while immigrants, in general, exert positive influences on US imports from – and exports to – their home countries, the influence of refugee immigrants is quite minimal when compared with that of non-refugee immigrants. For both immigrant types, however, evidence supporting the notion that immigrants act to offset cultural distance is observed. To conceptualize the economic meaning of our results, we provide estimates of the extent to which each type of immigrants offset transport costs.     

Product Complexity,Quality of Institutions and the Protrade Effect of Immigrants

The paper assesses the trade‐creating impact of foreign‐born residents on the international imports and exports of the French regions where they are settled. The protrade effect of immigrants is investigated along two intertwined dimensions: the complexity of traded goods and the quality of institutions in partner countries. The trade‐enhancing impact of immigrants is, on average, more salient when they come from a country with weak institutions. However, this positive impact is especially large on the imports of simple products. When we turn to complex goods, for which the information channel conveyed by immigrants is the most valuable, immigration enhances imports regardless of the quality of institutions in the partner country. Regarding exports, immigrants substitute for weak institutions on both simple and complex goods.     

Do High‐Skill Immigrants trigger High‐Quality Trade?

This paper investigates the links between product quality and the pro‐trade effect of ethnic networks using a large panel on bilateral stocks of immigrants with information for 19 OECD destination countries and 177 origin countries. In line with the approach of Rauch and Trindade, we classify traded goods according to their quality level and separately estimate pro‐trade elasticity of ethnic networks for each subgroup. We allow for heterogeneity of immigrants according to both the level of per capita income of their country of origin and their education level. Our findings suggest that the trend of the pro‐trade effect of immigrants over quality seems to be driven by the North–South specialisation across varieties for both supply and demand. Indeed, ethnic networks mostly facilitate imports of those varieties for which their countries of origin have a comparative advantage; as for exports, ethnic networks are more effective in promoting exports to their homeland of those varieties for which there is relatively higher demand. We show that the same trend applies to products characterised by the same degree of differentiation according to the classification proposed by Rauch and – given their lower liquidity constraints and advantages in human capital – we find a greater impact of high‐skilled migrants consistent across all quality levels.     

Immigration and Trade Creation for the United States: Role of Immigrant Occupation

Using a sample of 63 U.S. trading partners that constitute the major immigrant sending countries over the years 1991–2000 and using instrumental variable estimation this paper finds that the immigrant trade elasticity varies with the share of the immigrants in various occupation groups. The share of professional immigrants significantly increases the immigrant trade elasticity for all types of trade due to their ability to effectively use their network for trade creation. This effect is strongest for the Rauch’s differentiated imports where the immigrant specific home country information and immigrant demand for goods play a key role in increasing trade.     

国家文化距离对中国对外贸易的影响——基于31个国家和地区贸易数据的引力模型分析

随着国际贸易的不断发展,国家文化因素对它的影响作用逐渐得到重视。本文利用中国与31个国家和地区1995-2009年的贸易数据,引入Hofstede的国家文化维度建立中国对外贸易引力模型,研究国家文化距离对中国对外贸易的影响。研究显示,国家文化距离对中国贸易存在双重影响,作为整体变量,它对中国对外贸易有负面影响,作为组合变量,权力距离等几个维度对中国对外贸易有正面影响;此外,国家文化距离对中国进出口贸易的影响程度存在差异。     

US Economic Sanctions Against China: Who Gets Hurt?

The United States maintains a broad spectrum of economic sanctions against China ranging from export controls to prohibitions on certain imports. Our study finds that, although from a macroeconomic perspective, US sanctions have had no significant adverse effect on China's overall economic growth and trade between the two countries, they do have a negative impact on producers and consumers in both countries. US economic sanctions have hindered technology transfer to China and US investment in China. US restrictions on imports from China have caused deadweight losses for the US due to higher domestic production costs for import substitutes and a reduction in consumption. US export controls have hindered US exports to China and contributed to large US trade deficits with China. The export controls have also caused losses of high‐paid jobs in the United States and benefited competitors from other countries. In addition, US economic sanctions against China have had significant third‐party effects. China's diversification of imports to sources other than the United States may have a long‐term effect on US exports to China even after US economic sanctions against China are lifted.     

Migration and servicification: Do immigrant employees spur firm exports of services?

Services play an increasingly important role in production, employment and international trade but are subject to substantially higher trade costs relative to manufactured goods. Knowledge of how these trade costs can be mitigated is important for facilitating trade of services. In this paper, we analyse the role of immigrant employees as facilitators of firm exports of services, a role that remains largely unexamined. We bridge the gap in existing research by drawing on new data for nearly 30,000 Swedish firms during the period 1998–2007 within a heterogeneous firm framework. The results have important policy implications. As the multilateral approach to facilitating trade is challenged and more countries are imposing measures to restrict the cross‐country mobility of people, policymakers may need to find new ways to promote exports of services. Our results indicate that immigrant employees spur firms' export of services activities: hiring one additional foreign‐born worker can increase services exports by approximately 2.5 per cent, on average, with a stronger effect found for skilled and newly arrived immigrants. Therefore, policymakers could leverage the findings of this study to implement initiatives that utilise high‐skilled immigrants to promote services exports.     

The Trade‐Off between Foreign Direct Investments and Exports: The Role of Multiple Dimensions of Distance

To serve foreign markets, firms can either export or set up a local subsidiary through horizontal foreign direct investment (FDI). The conventional proximity–concentration theory suggests that FDI substitutes for trade if distance between countries is large, while exports become more important if scale economies in production are large. This paper investigates empirically the effect of different dimensions of distance on the choice between exports and FDI. We find that different dimensions of distance affect exports and FDI differently. There is clear evidence of a proximity–concentration trade‐off in geographical terms: the share of FDI sales in total foreign sales increases with geographical distance. The positive relation between import tariffs and FDI intensity provides further evidence for a trade‐off resulting from trade costs. On the other hand, the share of FDI decreases with language differences and cultural and institutional barriers. The latter dimensions of distance thus affect FDI more strongly than exports.     

Isolating the Network Effect of Immigrants on Trade

Within the migration–trade nexus literature, this paper proposes a more carefully defined measure of migration business networks and quantifies its impact on bilateral trade. Using cross‐sectional data and controlling for the overall bilateral stock of migrants, the share of migrants employed in managerial/business‐related occupations has a strong additional effect on trade. Those immigrants should be the ones directly involved in the diffusion and transmission of information relevant for companies trading with other countries. Their presence is found to increase the volume of trade, especially of imports, beyond the already known effect of immigrants or highly educated immigrants. When we control for the presence of highly educated immigrants, the share of immigrants in business network occupations shows a particularly large effect on trade in differentiated goods. We also find that highly educated individuals in business‐related occupations are those contributing to stimulate import and export by the largest margin. Business network effects seem particularly important in stimulating exports to culturally different countries, such as those with different language and legal origin.     

Anti‐dumping duty circumvention through trade rerouting: Evidence from Chinese exporters

We study the evasion of US anti‐dumping duties by some Chinese exporters through trade rerouting via third countries or regions. Using detailed monthly trade data reported by China and the US Customs during the period of 2002–06, we find that US anti‐dumping actions against China lead to a stronger positive correlation between US imports from third countries and Chinese exports to the same third countries. Such a positive correlation is more pronounced for the products subject to anti‐dumping duties (treatment groups) than similar products not subject to these duties (control groups). The evidence is stronger for less‐differentiated products whose certificates of origins are easier to be modified and is stronger for third countries where the rerouting cost is low. These findings are consistent with a trade rerouting story, rather than a simple story of trade diversion (i.e., increase in some third countries' imports from China) and trade deflection (i.e., increase in some third‐country exports to the US). We also rule out other alternative stories, consider prior production in third countries and concurrent anti‐dumping actions against China or third countries, pay a particular attention to the many zero trade flows in the monthly level data and check the robustness to using an alternative control group and quarterly data, etc.     

文化距离会阻碍文化服务输出吗？ ——基于2006~2012 年跨国数据的检验

本文利用2006~2012年216个国家间的文化服务贸易数据检验了文化距离对国家间文化服务贸易的影响。研究显示,以Hofstede国家文化维度测量的文化距离会显著阻碍国家间总体文化服务贸易的发展;互联网的普及和国家间说同种语言人口比例的上升会部分抵销文化距离带来的负向作用。具体来看,文化距离对文化信息服务存在显著负向作用,对文化产品再生产或分配许可贸易会产生正向作用;不同维度的文化距离对文化服务贸易的影响也存在显著异质性。     

The Trade Effects of US Anti‐dumping Actions against China Post‐WTO Entry

Since China's entry into the WTO, US anti‐dumping (AD) actions against China have increased, particularly with respect to multiple petitions. Distinguishing between US single and multiple petitions, we examine the trade effects of US AD actions against China based on an unbalanced panel of quarterly trade data. The results show that a US single petition investigation greatly restrains US imports of the filed products from China but also causes more significant import diversion from non‐named countries. In the short run, a preliminary AD duty imposed on China via a US multiple petition not only restrains US imports of the filed products from China but also prevents trade diversion from non‐named countries. In the long run, a final AD duty on China resulting from a US multiple petition creates a larger destructive effect on China and causes US import diversion from non‐named countries. Thus, a final AD duty imposed on China following a US multiple petition not only harms China's exports but also fails to help the US achieve import substitution. Furthermore, we have been able to reveal the negative trade effect of a preliminary AD duty even in cases where the ultimate decision is not to impose a final duty.     

How Do US Economic Sanctions Affect EU's Trade with Target Countries?

We investigate the impact of US economic sanctions on EU's trade using a panel data approach expressed in a two‐level framework. Both multilateral and unilateral sanctions involving the US and the EU have a negative impact on EU trade (total, imports and exports). We argue that unilateral sanctions, if extensive in nature, would have a depressing impact on target countries’ trade, especially in the stage after sanctions have been imposed. Over time, both multilateral and unilateral sanctions lead to an increase in a target country's exports to the EU, lending support to the third‐country effect of sanctions.     

International trade in durable goods: Understanding volatility, cyclicality, and elasticities

Data for OECD countries document: 1. imports and exports are about three times as volatile as GDP; 2. imports and exports are pro-cyclical, and positively correlated with each other; 3. net exports are counter-cyclical. Standard models fail to replicate the behavior of imports and exports, though they can match net exports relatively well. Inspired by the fact that a large fraction of international trade is in durable goods, we propose a two-country two-sector model in which durable goods are traded across countries. Our model can match the business cycle statistics on the volatility and comovement of the imports and exports relatively well. The model is able to match many dimensions of the data, which suggests that trade in durable goods may be an important element in open-economy macro models.     

Trade Diversion as Firm Adjustment to Trade Policy: Evidence from EU Anti‐dumping Duties on Vietnamese Footwear

This paper evaluates the impact of the 2006 European Union anti‐dumping (AD) action on Vietnamese footwear in three markets: imports to the EU, footwear producers in Vietnam, and the trade diversionary adjustment of Vietnamese firms in the US market. We find that the AD action reduced Vietnamese imports to the EU by as much as 65 per cent. Given that the EU makes up almost two‐thirds of Vietnam's footwear exports and footwear is among the top four export industries for Vietnam, this reduction is economically significant. Consistent with predictions of our model, we find evidence of trade diversion by Vietnamese producers from the EU to the US market. Our difference‐in‐difference estimates of the AD actions on the value of Vietnamese footwear imports to the United States ranged from 69 to 71 per cent over the period 2004–07 and 69 to 72 per cent in terms of quantity. These results highlight the spillover effects of trade policy in third markets when firms adjust to trade barriers. Our results are robust to triple‐difference specifications where we adjust for trend differences and a series of placebo specifications.     

Trade,Diaspora and Migration to New Zealand

This paper examines the hypotheses that a greater stock of migrants in New Zealand from a particular country leads to more trade between that country and New Zealand, and a greater stock of New Zealanders living overseas in a particular country leads to more trade between that country and New Zealand. It also examines the relationships between migration, diaspora and tourism exports. The literature suggests that migrants can stimulate trade by lowering transaction costs, and by bringing with them preferences for goods produced in their home country. Our approach is to apply panel data techniques, within the framework of a standard gravity model of trade, to a dataset consisting of information on 233 countries in each of the 26 years between 1981 and 2006. We estimate a random effects panel sample selection model using correlated random effects. Our results indicate that migration does indeed stimulate trade. In our benchmark specification, merchandise exports from and imports to New Zealand both have a statistically significant relationship with numbers of migrants in New Zealand; imports also have a statistically significant relationship with numbers of New Zealanders overseas. Our results also suggest that migration stimulates imports more than exports.     

Corruption and International Trade: An Empirical Investigation of African Countries

This paper attempts to estimate the effect of corruption on the flows of exports and imports of African countries. Using the gravity model approach and annual data for the period 1998–2007, we obtain negative and statistically significant correlations between the values of exports and imports and the levels of corruption in Africa and trading partners. Thus the results support the view that corruption adversely affects international trade. Our estimates suggest that if a country with Africa’s average corruption perception index of 2.8 were to improve its corruption level to Botswana’s 5.9, its exports would improve by about 15 per cent and imports by about 27 per cent.     

Heterogeneous immigrants,exports and foreign direct investment: The role of language skills

We investigate the interplay of language skills and immigrant stocks in determining bilateral FDI outstocks of OECD reporting countries. Applying a Poisson panel estimator to 2004–11 data, we find robust evidence for a positive effect of bilateral immigrants on bilateral FDI‐provided that residents of the two countries have few language skills in common. We find a similar effect for immigrants from third countries that speak the language(s) of the FDI host country, making them potential substitutes for bilateral migrants. Our findings suggest that immigrants facilitate outgoing FDI through their language skills, rather than through other characteristics like cultural familiarity.     

Exchange-rate sensitivity of commodity trade flows: Does the choice of reporting country affect the empirical estimates?

While the effects of currency fluctuations on trade have long been of interest to economic researchers, the most recent trend in the literature is to estimate commodity trade flows between pairs of countries. This raises an important question: Does it matter which country reports the data? This study investigates 96 industries that are reported both as exports by the United States and as imports by South Korea. Since export data are FOB and import data are CIF, the Korean imports are expectedly larger than the US exports. Correspondingly, our cointegration analysis produces drastically different results between specifications. Nonparametric analysis shows that the Korean imports are more sensitive to real exchange-rate fluctuations than US exports, signifying the importance of cost of insurance and freight, as well as the data's conversion into dollars.