A Cross Country View On South-North Migration And Trade.Dissecting the Channels

We explore the nexus between South–North migration and trade in a cross-country framework over the period 1990–2005. In addition to the relatively unexploited cross-country framework, our main contribution resides in the search for heterogeneous responses of trade to migration according to different goods typologies. Besides the usual distinction between homogeneous and differentiated products dictated by the information channel, we also investigate the effects of migration on trade in primary and final goods and in labor- and capital-intensive goods with the aim of assessing the preference and technology channels as well. Our results show that, as expected, migration enhances the import of primary and final goods (preference channel) and the export of differentiated, low elasticity of substitution goods (information channel). However, there is some evidence that the increase in the presence of migrants from the South enhances the export of labor intensive goods (technology channel).