GEP Research Paper 00/23
The Link between Immigration and Trade: Evidence from the UK
S. Girma and Z. Yu
This paper was subsequently published in Weltwirtschaftliches Archiv, Vol. 138, No. 1, 2002.
Abstract
This paper investigates the link between immigration and trade using recent U.K data. Imigration from non-Commonwealth countries is shown to have a significant export-enhancing effect. By contrast, immigration from Commonwealth countries is found to have no substantial impact on exports. We conjecture that this could be because immigrants from the U.K' s former colonies (viz. Commonwealth countries) do not bring with them any new information that can help substantially reduce the transaction cost of trade between their home countries and the host nation. The study also reveals a pro-imports effect of immigration from the non-Commonwealth countries, whereas immigration from the Commonwealth appears to be reducing imports, perhaps reflecting trade-substituting activities by immigrants.
Issued in December 2000.
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