TY - CEPII
A1 - Erik Figueiredo
A1 - Luiz Renato Lima
A1 - Gianluca Orefice
TI - Third Country Effect of Migration: the Trade-Migration Nexus Revisited
IS - 2016-22
T3 - Working Papers
KW - Trade-Migration
KW - Third-Country Effect
KW - Quantile Regression
KW - Imputation
N2 - This paper proposes a new channel through which migrants can affect the import demand of the host country. In migrating from origin to destination country, migrants observe a change in the prices of the bundle of consumable goods. In particular, the migration decision can reflect a reduction in the price of imported goods (due to lower applied tariff) for the consumption bundle of migrants: emigration towards less (tariff) protected countries allows the consumption of products that were prohibitively protected in the origin countries of migrants. To test this channel we estimate the import demand effect of migrant groups coming from third high (tariff) protected countries. We use a theory-grounded gravity estimations and a fresh econometric techniques able to address both the zero migration flows problem and the endogeneity of migrants. Our results suggest that such a third-country immigrant effect is significant and positive.
ER -