Trade, diaspora and migration to New Zealand

NZIER has always had a strong interest in understanding the way in which the New Zealand economy interacts with the rest of the world. We have a long history of producing research into trade liberalisation and globalisation. As the global economy becomes ever more complex, we are now turning our attention to issues such as services, investment, technology transfer and the role of people movement in promoting economic growth and productivity. NZIER is delighted to continue this tradition by funding this important and innovative piece of research by David Law, Murat Gen and John Bryant into the links between trade flows and the movement of people across borders. This research was funded by NZIER in celebration of our 50th Anniversary in 2008. During this very challenging period for the global economy, there has been a tendency for policy makers to implement inwards-focused policies aimed to protecting domestic jobs and promoting domestic economic activity. Such policies are politically popular, but can be economically inefficient and often come at the expense of deeper economic integration between countries. One particularly topical area of policy discussion is the role of immigration in promoting economic growth. New Zealand has long been reliant on immigration to boost its population and to fill gaps in the labour market. And many Kiwis love to travel overseas to gain life and work experience. Given these continual inflows and outflows, it is interesting to consider how people movements might affect the New Zealands exports and imports of goods and services, and thus how immigration policy might be used as a policy lever to boost our international linkages. The paper uses empirical techniques to investigate the links between trade, migration and New Zealands diaspora. It clearly shows that inwards and outwards migration has a positive effect on goods and tourism trade. This suggests that policy makers could design immigration policy with these links in mind in order to maximise the economic potential of migrants. If trade follows migration flows, then an important avenue for boosting New Zealands integration with the global economy may be encouraging migrants from important trading partners.Diaspora, trade, Migration, New Zealand, economic growth

Trade and Migration to New Zealand

This paper examines the hypothesis that a greater stock of migrants in New Zealand from a particular country leads to more trade between that country and New Zealand. The literature suggests that migrants can stimulate trade by lowering transaction costs, and by bringing with them preferences for goods produced in their home country. We use panel data techniques within the framework of a standard gravity model of trade. Our sample includes an average of over 170 countries for the years 1981 to 2001. Previous studies of trade and migration have not dealt satisfactorily with problems of unobserved heterogeneity and selection bias. We address these problems using correlated random effects and selection models. Results suggest that larger migrant stocks are associated with higher trade flows.Migration; International Trade; Panel Data; New Zealand

Trade and Migration to New Zealand

This paper examines the hypothesis that a greater stock of migrants in New Zealand from a particular country leads to more trade between that country and New Zealand. The literature suggests that migrants can stimulate trade by lowering transaction costs, and by bringing with them preferences for goods produced in their home country. We use panel data techniques within the framework of a standard gravity model of trade. Our sample includes an average of over 170 countries for the years 1981 to 2001. Previous studies of trade and migration have not dealt satisfactorily with problems of unobserved heterogeneity and selection bias. We address these problems using correlated random effects and selection models. Results suggest that larger migrant stocks are associated with higher trade flowsMigration, Internatinoal Trade, Panel Data, New Zealand

The impact of immigration on international trade: a meta‐analysis

Since the early 1990s many studies have been conducted on the impact of international migration on international trade, predominantly from the host country perspective. Because most studies have adopted broadly the same specification, namely a log‐linear gravity model of export and import flows augmented with the logarithm of the stock of immigrants from specific source countries as an additional explanatory variable, the resulting elasticities are broadly comparable and yield a set of estimates that is well suited to meta‐analysis. We therefore compile and analyze in this paper the distribution of immigration elasticities of imports and exports across 48 studies that yielded 300 estimates. The results confirm that immigration boosts trade, but its impact is lower on trade in homogeneous goods. An increase in the number of immigrants by 10 percent increases the volume of trade by about 1‐2 percent The migrant elasticity of imports is on average similar to that of exports. The estimates are affected by the choice of some covariates, the nature of the data (cross‐section or panel) and the estimation technique. Elasticities vary between countries in ways that cannot be explained by study characteristics; host country differences in immigration policies do apparently matter for the trade impact. The trade‐enhancing impact of migration appears to be greater for migration between countries of different levels of development than between developed countries

The Impact of Immigration on International Trade: A Meta-Analysis

Since the early 1990s many empirical studies have been conducted on the impact of international migration on international trade, predominantly from the host country perspective. Because most studies have adopted broadly the same specification, namely a log-linear gravity model of export and import flows augmented with the logarithm of the stock of immigrants from specific source countries as an additional explanatory variable, the resulting elasticities are broadly comparable and yield a set of estimates that is well suited to meta-analysis. We therefore compile and analyze in this paper the distribution of immigration elasticities of imports and exports across 48 studies that yielded 300 observations. The results show that immigration complements rather than substitutes for trade flows between host and origin countries. Correcting for heterogeneity and publication bias, an increase in the number of immigrants by 10 percent may be expected to increase the volume of trade on average by about 1.5 percent. However, the impact is lower for trade in homogeneous goods. Over time, the growing stock of immigrants decreases the elasticities. The estimates are affected by the choice of some covariates, the nature of the data (cross-section or panel) and the estimation technique. Elasticities vary between countries in ways that cannot be fully explained by study characteristics; trade restrictions and immigration policies matter for the impact of immigration on trade. The migrant elasticity of imports is larger than that of exports in about half the countries considered, but the publication bias and heterogeneity-corrected elasticity is slightly larger for exports than for imports.international trade, imports, exports, immigration, gravity model, meta-analysis

The impact of immigration on international trade: a meta-analysis

Since the early 1990s many empirical studies have been conducted on the impact of international migration on international trade, predominantly from the host country perspective. Because most studies have adopted broadly the same specification, namely a log-linear gravity model of export and import flows augmented with the logarithm of the stock of immigrants from specific source countries as an additional explanatory variable, the resulting elasticities are broadly comparable and yield a set of estimates that is well suited to meta-analysis. We therefore compile and analyze in this paper the distribution of immigration elasticities of imports and exports across 48 studies that yielded 300 observations. The results show that immigration complements rather than substitutes for trade flows between host and origin countries. Correcting for heterogeneity and publication bias, an increase in the number of immigrants by 10 percent may be expected to increase the volume of trade on average by about 1.5 percent. However, the impact is lower for trade in homogeneous goods. Over time, the growing stock of immigrants decreases the elasticities. The estimates are affected by the choice of some covariates, the nature of the data (cross-section or panel) and the estimation technique. Elasticities vary between countries in ways that cannot be fully explained by study characteristics; trade restrictions and immigration policies matter for the impact of immigration on trade. The migrant elasticity of imports is larger than that of exports in about half the countries considered, but the publication bias and heterogeneity-corrected elasticity is slightly larger for exports than for imports.international trade, imports, exports, immigration, gravity model, meta-analysis

Health Shocks and Child Time Allocation Decisions by Households: Evidence from Ethiopia

Little is currently known about the effects of shocks to parental health on the allocation of children’s time between alternative activities. Using longitudinal data from the Ethiopian Young Lives surveys of 2006 and 2009, we analyze the effect of health shocks on the amount of children’s time spent in work, leisure and education. We find that paternal illness increases the time spent in income-generating work but maternal illness increases the time spent in domestic work. Moreover, maternal illness has a relatively large effect on daughters while paternal illness has a relatively large effect on sons. Overall, parental illness leads to large and significant increases in the amount of child labour as defined by UNICEF

THE CAUSALITY RELATIONSHIPS BETWEEN FDI AND R&D IN EUROPEAN UNION

Technological development and R&D activities are accepted as one of the factors of basic production in endogenous growth theories. There has been an increasing interest towards R&D on the level of both firm and country. Moreover countries regard FDI as an important element which increase R&D activities. Although there are numerous studies which investigate relationship of both FDI and R&D on macroeconomic variables such as economic growth, employment and export; the number of studies which investigate the relationship between FDI and R&D is quite few. The aim of this study is to analyze relationships between FDI and R&D in the example of EU15 and EU27. For this aim, 1996–2009 period data of mentioned countries were considered and dynamic panel causality testing was done. According to the findings obtained from empirical test made in the study, there is one-way causality relationship among EU15 and EU 27 countries from FDI towards R&D. This finding points out to the existence of complementary relationship between FDI’s and R&D for EU

The knowledge-capital model: The case of intra-Asian foreign direct investment

Employing a panel dataset of bilateral inward and outward foreign direct investment (FDI) for 31 Asian countries and territories over the period 2001-2012, we estimate the knowledge-capital (KK) model to find the dominant type of FDI within Asia. We consider alternative estimation methods to deal with zero values, which form the majority of the bilateral observations. Based on a series of model selection and diagnostic tests, we conclude that Lognormal Hurdle and Poisson Pseudo-Maximum-Likelihood are the most appropriate. Controlling for host and source country characteristics, our findings suggest that vertical FDI is the dominant type between Asian countries. However, we find little empirical evidence in support of the KK model’s predictions for its key variables, such as total GDP and skill difference, when country fixed effects are included. Some factors (distance, trade costs to both source and host country, the GDP difference between source and host country, and a common spoken language) are found to have statistically significant impacts on the volume of FDI between Asian countries, regardless of whether or not fixed effects are included