Immigration-trade links: Evidence from Portugal

Abstract

This article tests the relation between immigration and Portuguese bilateral trade, considering the twenty-seven European partners (EU27). Using a static and dynamic panel data analysis, the results show that the stock of immigrants has a positive effect on Portuguese exports, imports and bilateral intra-industry trade (IIT). These results suggest that immigration affects all types of trade in a positive way. The findings also suggest that the increase of immigrant entrepreneurs reinforce the positive effect on exports and on IIT. The dynamic results confirm the positive effect of the immigration stock on horizontal and vertical IIT. Copyright © 2013 Juraj Dobrila University of Pula, Department for Economics and Tourism "Dr. Mijo Mirković".