Migrants and imports: Evidence from Dutch firms

Abstract

This paper examines the effect of hiring migrants on firms' imports using a rich employer–employee dataset from the Netherlands for 2010–17. We use an instrumental variables strategy, and find that firms that employ migrants from a high-income country are more likely to import from that country. Our benchmark specification indicates that a one standard deviation increase in the share of migrant workers from a certain country raises their employer's probability of importing from those workers' origin country by 6.6 percentage points, explaining half of the average probability of importing from a given country. This result is robust to a battery of sensitivity checks, and the effects are driven largely by migrants working in trade intermediaries that import final goods and inputs. Our results suggest that migrants help to erode informational barriers and enable their employers to source goods from abroad.