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Title: Using the Gravity Equation to Explain the Portuguese Immigration-trade Link
Author: Faustino, Horácio C.
Leitão, Nuno Carlos
Keywords: intra-industry trade
gravity model
panel data
Issue Date: 2008
Publisher: ISEG – Departamento de Economia
Citation: Faustino, Horácio C. e Nuno Carlos Leitão. 2008. "Using the Gravity Equation to Explain the Portuguese Immigration-trade Link". Instituto Superior de Economia e Gestão - DE Working papers nº 12-2007/DE/SOCIUS
Series/Report no.: DE Working papers;nº 12-2007/DE/SOCIUS
Abstract: This paper tests the relation between immigration and Portuguese bilateral trade. Using a panel data analysis, the results show that the stock of immigrants has a positive effect on Portuguese exports, imports and bilateral intra-industry trade. The underlying assumption is that immigration contributes to decrease the costs of transactions, which in turn promotes trade flows. The results do not confirm the hypothesis of a negative effect of immigration on Portuguese exports. Our findings suggest that when immigrants to Portugal come 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.
ISSN: 0874-4548
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Appears in Collections:DE - Documentos de trabalho / Working Papers
SOCIUS - Documentos de Trabalho / SOCIUS - Working Papers

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