Immigrant networks and the U.S. bilateral trade: The role of immigrant income

Research output: Chapter in Book/Report/Conference proceedingChapter

1 Scopus citations


This chapter examines the role of immigrant networks on trade, particulalry through the demand effect. First, we examine the effect of immigration on trade when the immigrants consume more of the good that is abundant in their home country than the natives in a standard Heckscher-Ohlin model and find that the effect of immigration on trade is a priori indeterminate. Our econometric gravity model consisting of 63 major trading and immigrant-sending country for the United States over 1991-2000. We find that the immigrants income, mostly through demand effect has a significant negative effect on U.S. imports. However, if we include the effect of the immigrant income interacted with the size of the immigrant network, measured by the immigrant stock, we find that higher immigrants income lowers the immigrant network effect for both U.S. exports and imports. This we find in addition to the immigrants stock elasticity of 0.27% for U.S. exports and 0.48% for U.S. imports. Capturing the immigrant assimilation with the level of immigrant income and the size of the immigrant enclave this chapter finds that the immigrant network effect on trade flows is weakened by the increasing level of immigrant assimilation.

Original languageEnglish (US)
Title of host publicationMigration and Culture
PublisherEmerald Group Publishing Ltd.
Number of pages17
ISBN (Print)9780857241535
StatePublished - 2010

Publication series

NameFrontiers of Economics and Globalization
ISSN (Print)1574-8715

All Science Journal Classification (ASJC) codes

  • Economics, Econometrics and Finance(all)


  • Heckscher-Ohlin
  • Immigrant assimilation
  • Immigrant demand
  • Immigrant income
  • Immigrant networks
  • Trade


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