TY - JOUR

T1 - Does immigrant employment matter for export sales? Evidence from Denmark

AU - Hiller, Sanne

PY - 2013/6

Y1 - 2013/6

N2 - Immigration impacts on the economy in ample ways: it affects growth, wages and total factor productivity. This study deals with the effects of immigration on firm exports. Can firms benefit from hiring immigrants to expand their export sales? Or do immigrants who live in the firm's region affect trade? In contrast to the existing literature, we are able to distinguish these two distinct channels. Using matched employer-employee data from Denmark for the years 1995-2005, we provide novel insights in the nexus between exports and immigration. We further contribute to the literature by providing first evidence on the adjustment of firms' product portfolio in response to immigration. Our empirical results are consistent with the claim that immigration lowers barriers to trade. Both, regional immigration and foreign employment matter for the composition of firm-level exports. As a novel insight, our findings suggest that firms benefit from immigration in terms of expanded export sales, when they hire foreign employees. We only find weak evidence for the local presence of foreigners to increase export sales, which we ascribe to the conjecture that at least some trade-cost reducing forces of immigration like for example intercultural knowledge or personal and business networks abroad, can only be accessed or exploited via foreign employment.

AB - Immigration impacts on the economy in ample ways: it affects growth, wages and total factor productivity. This study deals with the effects of immigration on firm exports. Can firms benefit from hiring immigrants to expand their export sales? Or do immigrants who live in the firm's region affect trade? In contrast to the existing literature, we are able to distinguish these two distinct channels. Using matched employer-employee data from Denmark for the years 1995-2005, we provide novel insights in the nexus between exports and immigration. We further contribute to the literature by providing first evidence on the adjustment of firms' product portfolio in response to immigration. Our empirical results are consistent with the claim that immigration lowers barriers to trade. Both, regional immigration and foreign employment matter for the composition of firm-level exports. As a novel insight, our findings suggest that firms benefit from immigration in terms of expanded export sales, when they hire foreign employees. We only find weak evidence for the local presence of foreigners to increase export sales, which we ascribe to the conjecture that at least some trade-cost reducing forces of immigration like for example intercultural knowledge or personal and business networks abroad, can only be accessed or exploited via foreign employment.

KW - Firm-level analysis

KW - International trade

KW - Matched employer-employee data

KW - Migration

KW - Economics

UR - http://www.scopus.com/inward/record.url?scp=84873749119&partnerID=8YFLogxK

U2 - 10.1007/s10290-013-0146-5

DO - 10.1007/s10290-013-0146-5

M3 - Journal articles

AN - SCOPUS:84873749119

VL - 149

SP - 369

EP - 394

JO - Review of World Economics

JF - Review of World Economics

SN - 1610-2878

IS - 2

ER -