The causal effect of trade on migration: Evidence from countries of the Euro-Mediterranean partnership

Abstract

In the attempt to reduce migration pressure, since 1995, the European Union has been planning to establish a free trade area with developing countries bordering the Mediterranean Sea. The process is still ongoing. Our paper tests whether it is likely to be an effective policy. We estimate a gravitational model of bilateral migrations on bilateral exports from the Mediterranean Third Countries (South) to the European Union (North) over the period 1970-2000, using different specifications. We find, in line with most of the literature, a significantly positive correlation (called "complementarity") between exports and migrations from the South to the North. Then we go one step further, trying to solve the potential endogeneity problem using average trade tariffs and bilateral exchange rate volatility as instruments for trade. Based on the OLS as well as the 2SLS results, liberalizing trade in the area of the Euro-Mediterranean partnership does not seem to be an effective policy to mitigate the migration flows, at least in the short run.

Measuring International Migration in Azerbaijan

“…In this regard, quantitative methods are the best to find relations between various factors in measuring of migration. Indeed, many quantitative studies found economic factors as the leading determinant in the fostering of international migration [23][24][25][26][27][28][29][30][31][32]. Jennissen [33], Balderas and Greenwood [27], Pânzaru [29] and Campaniello [31], analyzed the reasons of international migration in the European Union and identified that economic factors cause people to move to other countries.…”

Aid, trade and migration: How do bilateral flows interact?

“…Accordingly, liberalising trade should decrease incentives to migrate. However, if immigrants do prefer goods produced in their country of origin, migration and trade can easily be complements (Campaniello, ). In addition, migration can also reduce trade costs (see, for instance, Felbermayr and Toubal, ).…”

The Import of 'Cultural Goods' and Emigration: An Unexplored Relation

“…A paper that is somewhat related to this literature and which has important links with our research question is Campaniello (2014). This paper looks at the effect of trade on migration using a gravity model and, at the same time, addresses the endogeneity issue of trade flows.…”

“…Empirically, the positive correlation is particularly evident. Intuitively these two variables might be positively related because of the role of aggregate bilateral trade relations; as argued by Campaniello (2014) trade per se (imports of cultural and non-cultural are positively correlated Fig.1b) enhances links between countries and migrants may utilize these links to enter the receiving country. To tackle this issue, we adopt an empirical approach that disentangles the effect of cultural products from the more general impact of aggregate trade.…”