Review of World Economics

, Volume 141, Issue 2, pp 244–270

Does Immigration Help to Explain Intra-Industry Trade? Evidence for Spain

Article

DOI: 10.1007/s10290-005-0027-7

Cite this article as:
Blanes, J. Rev. World Econ. (2005) 141: 244. doi:10.1007/s10290-005-0027-7

Abstract

This paper argues and provides evidence that the stock of immigrants in a country has a positive effect on the share of its bilateral intra-industry trade (IIT). The paper links the literatures about immigration and trade and about IIT determinants. The key is that immigration contributes to trade transaction costs reduction and this would benefit the trade in differentiated products, i.e. IIT, more than the trade in homogeneous products, i.e. inter-industry trade. We test this hypothesis using Spanish data and departing from the models developed by Helpman. Results are robust to different IIT measures, estimation methods and specifications.

Keywords

Intra-industry trade immigration Spain 

Copyright information

© Kiel Institute for World Economics 2005

Authors and Affiliations

  1. 1.Universidad Pablo de OlavideSevillaSpain