Nothing Special   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/ise/isegwp/wp312008.html
   My bibliography  Save this paper

Immigration and Trade in Portugal: A Static and Dynamic Panel Data Analysis

Author

Listed:
  • Horácio C. Faustino
  • Nuno Carlos Leitão
Abstract
This article tests the relation between immigration and Portuguese bilateral trade, considering the fifteen European partners (EU15). Using a static and dynamic panel data analysis, the results show that the stock of immigrants has a positive effect on Portuguese exports, imports and bilateral intra-industry trade. These results suggest that immigration affects all types of trade in a positive way. The underlying assumption is that immigration contributes to decrease the costs of transactions, which in turn promotes all trade flows. The static and dynamic results do not confirm the hypothesis of a negative effect of immigration on Portuguese exports. In the static model, a 10% increase in immigration induces a 5.98 % increase in exports and a 5.55% increase in imports. The effect on the Portuguese trade balance is positive. However, the dynamic results for the export and import equations are more reliable, showing a smaller positive effect on exports. A 10% increase in bilateral immigration induces a 0.47% and 2.34% increase in exports and imports, respectively. Our findings also suggest that when immigrants to Portugal originate from a Latin partner-country, the effects on trade are stronger than in the case of immigrants from non-Latin countries. The study is based on an extended gravitational model, in order to incorporate the qualitative factors as control variables.

Suggested Citation

  • Horácio C. Faustino & Nuno Carlos Leitão, 2008. "Immigration and Trade in Portugal: A Static and Dynamic Panel Data Analysis," Working Papers Department of Economics 2008/31, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    • Handle: RePEc:ise:isegwp:wp312008
    as

    Download full text from publisher

    File URL: https://depeco.iseg.ulisboa.pt/wp/wp312008.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    2. Bergstrand, Jeffrey H, 1985. "The Gravity Equation in International Trade: Some Microeconomic Foundations and Empirical Evidence," The Review of Economics and Statistics, MIT Press, vol. 67(3), pages 474-481, August.
    3. Sourafel Girma & Zhihao Yu, 2002. "The link between immigration and trade: Evidence from the United Kingdom," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 138(1), pages 115-130, March.
    4. Richard Blundell & Stephen Bond, 2000. "GMM Estimation with persistent panel data: an application to production functions," Econometric Reviews, Taylor & Francis Journals, vol. 19(3), pages 321-340.
    5. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    6. Harald Badinger & Fritz Breuss, 2008. "Trade and productivity: an industry perspective," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 35(2), pages 213-231, April.
    7. Bergstrand, Jeffrey H, 1989. "The Generalized Gravity Equation, Monopolistic Competition, and the Factor-Proportions Theory in International Trade," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 143-153, February.
    8. David Greenaway & Robert Hine & Chris Milner, 1994. "Country-specific factors and the pattern of horizontal and vertical intra-industry trade in the UK," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 130(1), pages 77-100, March.
    9. Bergstrand, Jeffrey H, 1990. "The Heckscher-Ohlin-Samuelson Model, the Linder Hypothesis and the Determinants of Bilateral Intra-industry Trade," Economic Journal, Royal Economic Society, vol. 100(403), pages 1216-1229, December.
    10. Helpman, Elhanan, 1987. "Imperfect competition and international trade: Evidence from fourteen industrial countries," Journal of the Japanese and International Economies, Elsevier, vol. 1(1), pages 62-81, March.
    11. Gould, David M, 1994. "Immigrant Links to the Home Country: Empirical Implications for U.S. Bilateral Trade Flows," The Review of Economics and Statistics, MIT Press, vol. 76(2), pages 302-316, May.
    12. Rudolf Loertscher & Frank Wolter, 1980. "Determinants of intra-industry trade: Among countries and across industries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 116(2), pages 280-293, June.
    13. Robert C. Feenstra & James R. Markusen & Andrew K. Rose, 2001. "Using the gravity equation to differentiate among alternative theories of trade," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 34(2), pages 430-447, May.
    14. José V. Blanes, 2005. "Does Immigration Help to Explain Intra-Industry Trade? Evidence for Spain," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 141(2), pages 244-270, July.
    15. David Hummels & James Levinsohn, 1995. "Monopolistic Competition and International Trade: Reconsidering the Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(3), pages 799-836.
    16. Dunlevy, James A. & Hutchinson, William K., 1999. "The Impact of Immigration on American Import Trade in the Late Nineteenth and Early Twentieth Centuries," The Journal of Economic History, Cambridge University Press, vol. 59(4), pages 1043-1062, December.
    17. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    18. Baier, Scott L. & Bergstrand, Jeffrey H., 2001. "The growth of world trade: tariffs, transport costs, and income similarity," Journal of International Economics, Elsevier, vol. 53(1), pages 1-27, February.
    19. Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-116, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Insel, Aysu & Sungur Cakmak, Nesrin, 2010. "The Impacts of the Turkish Emigrants on Turkish Exports and Imports in Europe," MPRA Paper 22100, University Library of Munich, Germany, revised 30 Apr 2010.
    2. Murat Genc & Masood Gheasi & Peter Nijkamp & Jacques Poot, 2012. "The impact of immigration on international trade: a meta-analysis," Chapters, in: Peter Nijkamp & Jacques Poot & Mediha Sahin (ed.), Migration Impact Assessment, chapter 9, pages 301-337, Edward Elgar Publishing.
    3. Mahmut Yasar & David Lisner & Roderick Rejesus, 2012. "Bilateral trade impacts of temporary foreign visitor policy," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(3), pages 501-521, September.
    4. Horácio Faustino & Isabel Proença, 2011. "Effects of Immigration on Intra-Industry Trade: A logit analysis," Working Papers Department of Economics 2011/19, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    5. Kadir KARAGÖZ, 2016. "Migration – trade nexus revisited: Empirical evidence from Turkish emigrants in OECD countries," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(4(609), W), pages 127-142, Winter.
    6. A. James Wynne & Chandrashekar Challa & John Palesis & Bernie Farkas, 2015. "A Conceptual Model: Impact Of Usage Of Social Media Tools To Enhance Project Management Success," Portuguese Journal of Management Studies, ISEG, Universidade de Lisboa, vol. 0(2), pages 55-72.
    7. Mehak Ejaz & Muhammad Ramzan Sheikh & Rana Zafar Hayat & Neelam Asghar Ali, 2022. "Overseas Labour Migration, Remittances, International Trade and Economic Growth Nexus in Pakistan," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 8(3), pages 166-175, September.
    8. Kadir KARAGÖZ, 2016. "Migration – trade nexus revisited: Empirical evidence from Turkish emigrants in OECD countries," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(4(609), W), pages 127-142, Winter.
    9. Horácio C. Faustino & Isabel Proença, 2015. "Immigration And Intra-Industry Trade: The Relevance Of Language, Qualification And Economic Integration," Portuguese Journal of Management Studies, ISEG, Universidade de Lisboa, vol. 0(1), pages 3-18.
    10. Nuno Carlos Leitão, 2013. "The Impact of Immigration on Portuguese Intra-Industry Trade," Working Papers 2013.20, Fondazione Eni Enrico Mattei.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Horácio Faustino & João Peixoto, 2009. "Immigration-Trade Links: The Impact of Recent Immigration on Portuguese Trade," Working Papers Department of Economics 2009/36, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    2. Horácio Faustino & Isabel Proença, 2011. "Effects of Immigration on Intra-Industry Trade: A logit analysis," Working Papers Department of Economics 2011/19, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    3. A. James Wynne & Chandrashekar Challa & John Palesis & Bernie Farkas, 2015. "A Conceptual Model: Impact Of Usage Of Social Media Tools To Enhance Project Management Success," Portuguese Journal of Management Studies, ISEG, Universidade de Lisboa, vol. 0(2), pages 55-72.
    4. Horácio C. Faustino & Isabel Proença, 2015. "Immigration And Intra-Industry Trade: The Relevance Of Language, Qualification And Economic Integration," Portuguese Journal of Management Studies, ISEG, Universidade de Lisboa, vol. 0(1), pages 3-18.
    5. Muhammad Shahbaz & Nuno Carlos Leit o & Muhammad Sabihuddin Butt, 2012. "Pakistan Intra-Industry Trade: A Panel Data Approach," International Journal of Economics and Financial Issues, Econjournals, vol. 2(2), pages 225-232.
    6. Tripathi, Sabyasachi & Leitão, Nuno Carlos, 2013. "India’s Trade and Gravity Model: A Static and Dynamic Panel Data," MPRA Paper 45502, University Library of Munich, Germany.
    7. Güzin Bayar, 2018. "Estimating export equations: a survey of the literature," Empirical Economics, Springer, vol. 54(2), pages 629-672, March.
    8. Guglielmo Maria Caporale & Christophe Rault & Robert Sova & Anamaria Sova, 2009. "Trade Specialisation and Economic Convergence: Evidence from Two Eastern European Countries," Discussion Papers of DIW Berlin 875, DIW Berlin, German Institute for Economic Research.
    9. Nuno Carlos Leitão, 2013. "The Impact of Immigration on Portuguese Intra-Industry Trade," Working Papers 2013.20, Fondazione Eni Enrico Mattei.
    10. Baier, Scott L. & Bergstrand, Jeffrey H., 2001. "The growth of world trade: tariffs, transport costs, and income similarity," Journal of International Economics, Elsevier, vol. 53(1), pages 1-27, February.
    11. Antonella Bellino & Giuseppe Celi, 2016. "The Role of Migration in the Variety and Quality of Trade: Evidence from Germany," German Economic Review, Verein für Socialpolitik, vol. 17(1), pages 1-25, February.
    12. Roger White & Bedassa Tadesse, 2011. "International Migration and Economic Integration," Books, Edward Elgar Publishing, number 14318.
    13. Horácio Faustino & Nuno Leitão, 2007. "Intra-Industry Trade: A Static and Dynamic Panel Data Analysis," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 13(3), pages 313-333, August.
    14. BELLINO, Antonella & CELI, Giuseppe, 2016. "The Migration-Trade Nexus in the Presence of Vertical and Horizontal Product Differentiation," CELPE Discussion Papers 137, CELPE - CEnter for Labor and Political Economics, University of Salerno, Italy.
    15. Leitão, Nuno Carlos & Tripathi, Sabyasachi, 2013. "Portuguese Trade and European Union: The Gravity Model," MPRA Paper 45994, University Library of Munich, Germany.
    16. repec:kap:iaecre:v:13:y:2007:i:3:p:313-333 is not listed on IDEAS
    17. Felipa Mello Sampayo, 2006. "The Geographic Distribution of Economic Activities of the USA Multinational Enterprises," DEGIT Conference Papers c011_040, DEGIT, Dynamics, Economic Growth, and International Trade.
    18. David Law & Murat Genç & John Bryant, 2013. "Trade, Diaspora and Migration to New Zealand," The World Economy, Wiley Blackwell, vol. 36(5), pages 582-606, May.
    19. Leitão, Nuno Carlos, 2012. "Globalization and United States’ Intra-Industry Trade," MPRA Paper 39756, University Library of Munich, Germany.
    20. Sithanonxay SUVANNAPHAKDY & Toshihisa TOYODA & Chris CZERKAWSKI, 2011. "Enhancing Trade Flows in ASEAN Plus Six," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 11(2).
    21. White, Roger & Tadesse, Bedassa, 2008. "Immigrants, cultural distance and U.S. state-level exports of cultural products," The North American Journal of Economics and Finance, Elsevier, vol. 19(3), pages 331-348, December.

    More about this item

    Keywords

    intra-industry trade; immigration; gravity model; panel data; Portugal.;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ise:isegwp:wp312008. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Vitor Escaria (email available below). General contact details of provider: https://aquila.iseg.ulisboa.pt/aquila/departamentos/EC .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.