The effects of refugee and non-refugee immigrants on US trade with their home countries

Abstract

Employing data on US immigrants and trade with 59 home countries for the years 1996–2001, we compare the extent to which refugee and non-refugee immigrants affect US trade with their home countries and provide the first evidence of variation in the US immigrant–trade relationship across immigrant types. We also consider the abilities of refugee and non-refugee immigrants to offset the trade-inhibiting influence of cultural distance. Our results show that while immigrants, in general, exert positive influences on US imports from – and exports to – their home countries, the influence of refugee immigrants is quite minimal when compared with that of non-refugee immigrants. For both immigrant types, however, evidence supporting the notion that immigrants act to offset cultural distance is observed. To conceptualize the economic meaning of our results, we provide estimates of the extent to which each type of immigrants offset transport costs.

Keywords:

• cultural distance
• gravity
• immigrants
• networks
• refugees
• trade

Acknowledgments

The authors thank the editor and two anonymous referees for helpful comments and suggestions.

Notes

1. Other important pieces of legislation that influenced the level and composition of both total immigrant inflows and refugee/asylee inflows during this period include the Refugee Relief Act of 1953, the Migration and Refugee Assistance Act of 1962 and the Refugee Act of 1980.

2. Tinbergen (1962) first applies the gravity specification to trade, and more recent research has established theoretical foundations for the model. See, for example, Anderson and van Wincoop (2003) and Feenstra (2004).

3. Detailed information regarding the WVS/EVS, including a description of the data collection methodology and additional country-specific examples can be found at www.worldvaluessurvey.org. While the WVS/EVS provides data for 81 countries, incomplete data restricts our sample to only 59 nations. A listing of the nations in our data set is provided in the appendix.

4. On average, the Values Surveys provide TSR and SSE values for 1190 residents of each nation in our sample. For the US, 1117 residents were surveyed. Mean values are un-weighted arithmetic averages.

5. Estimated cultural distances depicted in Figure 1 and all other data used in this study are available upon request.

6. Unless noted, data for explanatory variables are from the World Bank (2006).

7. Internal distance, when k = j, is derived as (Head and Mayer, 2000).

8. Using the Iceberg trade model, these estimates indicate the reduction in the cost of transporting goods to and from the immigrants' home countries that is attributable to the presence of each type of immigrant in the US.

9. Since geodesic distance is measured in kilometers, multiplying the resulting offset estimates by 1000 converts the estimates into meters of geodesic distance offset by a typical immigrant.