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Trade and Migration to New Zealand - WP 04/18

Publication Details

  • Trade and Migration to New Zealand
  • Published: Sep 2004
  • Status: Current
  • Authors: Bryant, John; Genç, Murat; Law, David
  • JEL Classification: F00; F10; F14; F22
  • Hard copy: Available in HTML and PDF formats only.

Trade and Migration to New Zealand

New Zealand Treasury Working Paper 04/18

Published: September 2004

Authors: John Bryant, Murat Genç and David Law


Table of Contents

This paper examines the hypothesis that a greater stock of migrants in New Zealand from a particular country leads to more trade between that country and New Zealand. The literature suggests that migrants can stimulate trade by lowering transaction costs, and by bringing with them preferences for goods produced in their home country. We use panel data techniques within the framework of a standard gravity model of trade. Our sample includes an average of over 170 countries for the years 1981 to 2001. Previous studies of trade and migration have not dealt satisfactorily with problems of unobserved heterogeneity and selection bias. We address these problems using correlated random effects and selection models. Results suggest that larger migrant stocks are associated with higher trade flows.

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Table of Contents

List of Tables

1 Introduction

2 Trends in migration and trade

3 Mechanisms through which migration could stimulate trade

4 Evidence on the activities of migrants in New Zealand

5 Previous econometric tests of the effects of migration on trade

6 Methodology

7 Results

8 Discussion


Appendix – Supplementary data and estimation results

twp04-18.pdf (319 KB) pp. 36

List of Tables


Thank you to William Greene, Dean Hyslop, Jacques Poot, Jim Rose, Richard Downing, Philip Liu, members of Treasury’s Applied Econometrics Group, and our colleagues in the Policy Coordination and Development Section for their contributions to this paper. This paper has also benefited from comments received in seminars given at Canterbury and Otago Universities, The New Zealand Association of Economists conference, The New Zealand Econometrics Study Group and the Australasian Meeting of the Econometric Society.


The views, opinions, findings, and conclusions or recommendations expressed in this Working Paper are strictly those of the authors. They do not necessarily reflect the views of the New Zealand Treasury. The New Zealand Treasury takes no responsibility for any errors or omissions in, or for the correctness of, the information contained in this Working Paper. The paper is presented not as policy, but to inform and stimulate wider debate.

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