The relation between global migration and trade networks

Abstract

In this paper we develop a methodology to analyze and compare multiple global networks. We focus our analysis on the relation between human migration and trade. First, we identify the subset of products for which the presence of a community of migrants significantly increases trade intensity. To assure comparability across networks, we apply a hypergeometric filter to identify links for which migration and trade intensity are both significantly higher than expected. Next we develop an econometric methodology, inspired by spatial econometrics, to measure the effect of migration on international trade while controlling for network interdependencies. Overall, we find that migration significantly boosts trade across sectors and we are able to identify product categories for which this effect is particularly strong.

How Do Illicit Drugs Move Across Countries? A Network Analysis of the Heroin Supply to Europe

“…As Reuter (2014) argued, besides geography, certain social factors, such as migration flow between two countries, may facilitate trafficking between them. Several studies in macroeconomics, for example, point out that social proximity between countries reduces the barriers for legal trade by providing opportunities for businesses and easier access to valuable information (Ghemawat, 2001;Prashantham, Dhanaraj, & Kumar, 2015;Rauch, 1999;Sgrignoli, Metulini, Schiavo, & Riccaboni, 2015). Therefore, it is reasonable to assume that the effect of social proximity would also apply to illegal trading, inasmuch as participants cannot rely on legal institutions to solve their disputes.…”

“…Language and cultural affinity facilitate cross-border transactions by providing traders with the opportunity to rely on non-economic, sociocultural factors (e.g., reputation and trust of suppliers, ethnic ties) to find international partners and to reduce uncertainties in trading (Lee & Park, 2016;Sgrignoli et al, 2015). As observed in legal trading, preexisting ties are a determinant factor during the search for a trading partner, and informal networks also play a key role in shaping international trade (Rauch, 1999).…”

“…Several studies in macroeconomics identify migration, common language, and past colonial relationships as primary social factors affecting legal trade (Frankel & Rose, 2002;Ghemawat, 2001;Lameli et al, 2013;Lee & Park, 2016;Rauch, 1999;Sgrignoli et al, 2015). Their effect is tested by considering migration flows among the 61 countries included within the analysis, the presence of a language spoken by at least 9% of the population in any pair of countries, and historical colonial relationships among countries.…”

Global multi-layer network of human mobility

“…Some scholars even considered relationships between human migration and economic links between countries (Fagiolo and Mastrorillo 2014, Sgrignoli et al . 2015). However, global human dynamics shows a complex nature containing various types of mobility, including such different processes as permanent relocations and short-term visits, and thus, cannot be fully understood through any single data source focusing on just one particular aspect of human behavior.…”

Big hits, export concentration and volatility

“…This feature is found to characterise many real-world applications besides trade, such as the internet(Faloutsos et al 1999;Riccaboni et al 2013), world-wide air transportation(Guimera et al 2005), migration(Sgrignoli et al 2015), mobile communications(Onnela et al 2007) and interbank payments(Soramäki et al 2007). …”