Works under Review
1. “Economic Integration Agreements, Immigrants, and Trade Costs” with Bedassa Tadesse.
Abstract: Using data on bilateral trade costs and the levels and depth of economic integration agreements (EIAs) among 35 OECD members and 137 other countries that span the years 1995-2009, we examine whether the influence of immigrants on bilateral trade costs, both at the aggregate level and across economic sectors, varies with the level of EIAs. Estimating a series of augmented gravity specifications using the multi-level mixed effects model (random intercepts and coefficients), we find that immigrants’ trade costs reduction effect vary non-linearly with the extent to which their host and home countries are integrated. Results from a series of robustness checks, obtained from the standard panel data estimation approaches and the Heckman sample selection model indicate the consistency of our findings. An important policy implication of this observation is that, while heterogeneous across country pairs, the trade costs reduction effect of immigrants remains strong even among country pairs at the peak level of their EIAs.
Last updated: October 4, 2018.