The issues we investigate are related to how migration flows between Mena and the Eu contribute to shaping Eu trade. We document industry-specific shifts in tradable goods, looking at how migration stocks correlate with Eu countries’ extensive margin [EM] and intensive margin [IM] of trade. First, we use the indicators of extensive and intensive margins [at 4-digit Sitc product level] by Hummels and Klenow [2005] which allow measurement of the impact on bilateral trade at country level, including trade between sending and receiving countries of migration. This model captures the effects through two different channels, namely preference/information and knowledge spillovers. To isolate the effect in terms of knowledge diffusion between the Eu and Mena, following [Bahar, Hausmann, Hidalgo 2014; Bahar, Rapoport 2018] we test the effect of migration on comparative advantages of the host country with third countries, excluding countries of origin and destination of migration. The novelty of the approach we propose is threefold. First, we explore the link between migration and intensive and extensive margins of trade between Eu and Mena countries, also disentangling the knowledge transmission channels in relation to migration flows between Eu and Mena countries. Secondly, we investigate how the pro-trade effect with respect to Mena migration flows differs with respect to flows from other major Eu partner areas. Thirdly, we check for the degree of technology embodied in traded goods by considering low, medium and high technology classes. Overall, the estimation results show that the trade effect of immigration from Mena to the Eu, both for IM and EM, is always positive while that of emigration from the Eu to Mena is negative or not significant. However, the trade effects of immigration encountered between Eu and Mena partners are lower with respect to other Eu partner areas. Besides, the migration-induced effect on bilateral trade is higher in low tech than in medium and high tech. If we concentrate on Eu trade with third countries, a measure adopted as a proxy for the spillover channel, we observe that immigration from Mena increases the intensive margin of Eu trade in medium tech products but not the extensive margin, and emigration does not have a significant impact. Interdependencies between migration and trade policies pointed out by the results of our investigation are meaningful for migration policies of Eu countries towards Mena.

Pro-trade effects and knowledge diffusion through migration between Mena and the Eu

Anna Maria Ferragina
;
Stefano Iandolo;Erol Taymaz
2020-01-01

Abstract

The issues we investigate are related to how migration flows between Mena and the Eu contribute to shaping Eu trade. We document industry-specific shifts in tradable goods, looking at how migration stocks correlate with Eu countries’ extensive margin [EM] and intensive margin [IM] of trade. First, we use the indicators of extensive and intensive margins [at 4-digit Sitc product level] by Hummels and Klenow [2005] which allow measurement of the impact on bilateral trade at country level, including trade between sending and receiving countries of migration. This model captures the effects through two different channels, namely preference/information and knowledge spillovers. To isolate the effect in terms of knowledge diffusion between the Eu and Mena, following [Bahar, Hausmann, Hidalgo 2014; Bahar, Rapoport 2018] we test the effect of migration on comparative advantages of the host country with third countries, excluding countries of origin and destination of migration. The novelty of the approach we propose is threefold. First, we explore the link between migration and intensive and extensive margins of trade between Eu and Mena countries, also disentangling the knowledge transmission channels in relation to migration flows between Eu and Mena countries. Secondly, we investigate how the pro-trade effect with respect to Mena migration flows differs with respect to flows from other major Eu partner areas. Thirdly, we check for the degree of technology embodied in traded goods by considering low, medium and high technology classes. Overall, the estimation results show that the trade effect of immigration from Mena to the Eu, both for IM and EM, is always positive while that of emigration from the Eu to Mena is negative or not significant. However, the trade effects of immigration encountered between Eu and Mena partners are lower with respect to other Eu partner areas. Besides, the migration-induced effect on bilateral trade is higher in low tech than in medium and high tech. If we concentrate on Eu trade with third countries, a measure adopted as a proxy for the spillover channel, we observe that immigration from Mena increases the intensive margin of Eu trade in medium tech products but not the extensive margin, and emigration does not have a significant impact. Interdependencies between migration and trade policies pointed out by the results of our investigation are meaningful for migration policies of Eu countries towards Mena.
2020
978-88-15-29082-3
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11386/4750794
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