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Immigration and international trade: Evidence from recent South Korean experiences

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Abstract

Using newly developed Korean immigration data, we empirically test the networks effects prediction. The main contribution of this article is to go one step further in finding empirical evidence to support heterogeneity in networks effects. Using their visa type, we separate immigrants into two groups—skilled immigrants and unskilled immigrants—and find that only skilled immigrants increase Korean imports from their home countries.

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... From the skilled perspective of migrants, Lim and Kim (2011) and Mundra (2010) forwarded that skilled migrants significantly improved US trade with their home countries. More recently, Kim and Lim (2016) concluded that in the case of Korean imports, skilled relative to unskilled immigrants played an important role in creating networks between home and host countries. ...
... The above equations follow from the standard gravity model with two core arguments, GDP and DST. The GDPs of both reporter and partner countries, a proxy for country size, are supposed to positively affect trade, and they are applied as two separate explanatory variables in equations (1) to (3) (see Gould, 1994;Kim & Lim, 2016). A large country is more likely to achieve economies of scale, increase exports and simultaneously possess the capacity to absorb imports. ...
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