The effect of immigrants on the extensive and intensive margins of trade

ABSTRACT

This study examines the impact of immigrants on the extensive and intensive margins of South Korean exports. Since trade data contain excessive zero trade flows, we adopt recently suggested Poisson and Gamma pseudo maximum likelihoods. ​​​Our finding shows that immigrant stock in South Korea has significant effect on both the extensive and intensive margins of South Korean exports. Immigrants’ network seems to decrease variable as well as fixed costs of trade.

KEYWORDS:

• Immigrants
• extensive margin
• intensive margin
• zero trade flows

JEL CLASSIFICATION:

• F10
• F22

Disclosure statement

No potential conflict of interest was reported by the author.​​​

Notes

¹ Head and Ries (1998), Rauch (1999), Rauch and Trindade (2002), Bandyopadhyay, Coughlin, and Wall (2007)​​​ and Peri and Requena (2010).

² Tobit, Heckman selection model, negative binomial PML, zero inflated PML and generalized least square such as Gamma PML and Poisson PML.

Additional information

Funding

This work was supported by National Research Foundation of Korea grant funded by the Korean Government [NRF-2014S1A3A2044643]. ​​​