<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>We contribute to the literature by exploring the variation in the trade-creating effect of migration networks across historical migrants and recent migrants by applying a micro-founded gravity model of trade. Both the stock of historical migrants and recent migrants variables are constructed by merging Canadian Census data with the migration data available in Statistics Canada. We address the endogeneity issue by applying IV estimators including two-step feasible GMM and PPML with IV and fixed effects by utilizing the imputed annual migration flow, the historical stock, and recent stock of migrants as instrumental variables proposed by <xref ref-type="bibr" rid="j_izajodm-2023-0007_ref_054">Peri and Requena (2010)</xref>. Taking Canadian geographical features into account, this study also applies carefully measured gravity variables. We control for the time-varying, exporter-year fixed effects, and importer-year fixed effects in a panel estimation. Estimated results show that annual migration, recent provincial stock of migrants, and historical stock of migrants significantly increase Canadian interprovincial trade. This impact is stronger for the stock of historical migrants relative to the stock of recent migrants and annual migration flow. Sub-sample analysis shows that both recent and historical migration consistently increase interprovincial service trade, only but not interprovincial goods trade. A greater combination of English and French-speaking provinces-pair significantly increases interprovincial trade. Regional trade agreements significantly impact the interprovincial trade of Canada. Our estimated results are robust to different estimation methods and alternative measures for the migrants’ stock and flow variables.</p>
</abstract>

We contribute to the literature by exploring the variation in the trade-creating effect of migration networks across historical migrants and recent migrants by applying a micro-founded gravity model of trade. Both the stock of historical migrants and recent migrants variables are constructed by merging Canadian Census data with the migration data available in Statistics Canada. We address the endogeneity issue by applying IV estimators including two-step feasible GMM and PPML with IV and fixed effects by utilizing the imputed annual migration flow, the historical stock, and recent stock of migrants as instrumental variables proposed by Peri and Requena (2010). Taking Canadian geographical features into account, this study also applies carefully measured gravity variables. We control for the time-varying, exporter-year fixed effects, and importer-year fixed effects in a panel estimation. Estimated results show that annual migration, recent provincial stock of migrants, and historical stock of migrants significantly increase Canadian interprovincial trade. This impact is stronger for the stock of historical migrants relative to the stock of recent migrants and annual migration flow. Sub-sample analysis shows that both recent and historical migration consistently increase interprovincial service trade, only but not interprovincial goods trade. A greater combination of English and French-speaking provinces-pair significantly increases interprovincial trade. Regional trade agreements significantly impact the interprovincial trade of Canada. Our estimated results are robust to different estimation methods and alternative measures for the migrants’ stock and flow variables.

Recent vs Historical Migrants: A Study on the Canadian Provincial Trade-Migration Nexus

IZA Journal of Development and Migration

This work is licensed under the Creative Commons Attribution 4.0 International License.

We contribute to the literature by exploring the variation in the trade-creating effect of migration networks across historical migrants and recent migrants by...

Recent vs Historical Migrants: A Study on the Canadian Provincial Trade-Migration Nexus

Published Online: Dec 31, 2023

Page range: -

Received: Mar 24, 2023

DOI: https://doi.org/10.2478/izajodm-2023-0007

Keywords
Interprovincial migration, interprovincial trade, the gravity model, IV approach

© 2023 Nusrate Aziz et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Recent vs Historical Migrants: A Study on the Canadian Provincial Trade-Migration Nexus

Published Online: Dec 31, 2023

Page range: -

Received: Mar 24, 2023

DOI: https://doi.org/10.2478/izajodm-2023-0007

KeywordsInterprovincial migration, interprovincial trade, the gravity model, IV approach

© 2023 Nusrate Aziz et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Keywords
Interprovincial migration, interprovincial trade, the gravity model, IV approach