Evgenii Monastyrenko (University of Luxembourg)

Migrants, networks and regional trade: Evidence from European regions

Co-author: Cem Özgüzel

Abstract

This paper presents the first cross-country evidence on the contribution of migrants to trade flows at the regional level. Using a novel database of regional trade flows between 267 European regions for 2013, this study examines how migrants affect trade flows between European regions and the rest of the world. A standard gravity model and shift-share instruments based on past settlements are used to claim causality. The results suggest that a 10% increase in immigration increases exports by 1.21%. This marginal effect is more substantial for highly qualified migrants (2.52%) and for imports (2.5%). The impact of migrants further varies by the level of economic development of the region and the quality of institutions in both the host and origin countries.

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