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Trade and Migration to New Zealand - WP 04/18

7.2  Extensions (continued)

Table 8– The effect of migration on tourism exports
Variable Tourism Exports (Model One) Tourism Exports (Model Two)
  Selection Trade Selection Trade
Migrant Stock 0.0258(0.0315) 0.1497***(0.0069) 0.1144**(0.0554) -0.1356***(0.0126)
Square of Migrant Stock --- --- -0.0139**(0.0063) 0.0299***(0.0009)
Zero Migrants -0.1516*(0.0906) 0.3354***(0.0289) -0.0282(0.1238) -0.0947***(0.0368)
Foreign GDP -0.1202(0.081) 0.7486***(0.0181) -0.1157(0.0808) 0.6682***(0.0192)
New Zealand GDP 2.1971***(0.6395) -0.8074***(0.2071) 2.1788***(0.6386) -0.78***(0.2068)
World GDP -0.6753*(0.3517) 2.9059***(0.1164) -0.659*(0.3515) 2.7892***(0.1154)
Population -1.5997***(0.2077) -1.2965***(0.0504) -1.5759***(0.2081) -1.0868***(0.0505)
Distance -1.6997***(0.119) -2.3758***(0.0183) -1.6799***(0.1184) -2.1694***(0.0185)
Non-English -0.7066***(0.0595) 0.0339**(0.016) -0.6821***(0.0597) -0.1783***(0.0158)
Average Migrant Stock 0.1981***(0.0326) 0.1508***(0.0079) 0.2248***(0.033) 0.1786***(0.0085)
Average Foreign GDP 0.662***(0.0885) 0.1653***(0.0191) 0.645***(0.0884) 0.1443***(0.0203)
Average Population 1.2887***(0.2092) 0.7824***(0.0506) 1.2739***(0.2095) 0.6941***(0.0508)
1995 Dummy 0.3309***(0.0964) 0.1518***(0.0286) 0.33***(0.0963) 0.1454***(0.0285)
Log Likelihood -976.3704 -4087.906 -976.0179 -4063.990
Observations 3385 2645 3385 2645
Countries 179 178 179 178

Notes – For definitions of the variables refer to Table 3. A constant term and country specific effects are included in all regressions. Dependent variables are short term visitor flows to New Zealand during any given year. Three stars (***) indicates that the coefficient is significantly different from zero at the 1% significance level, two stars (**) indicates that it is significant at the 5% level, and one star (*) indicates that it is significant at the 10% level.

In Table 8 we use short term visitor flows to proxy for tourism exports. It is evident from the table that migrants have a strong positive effect on tourism exports. There is evidence to suggest that this effect increases as the number of migrants from a given country increases.

Because there was a change to the way in which migrants were counted in the 1996 census that may influence these results, we repeat our analysis in Appendix Table 6 for the period 1996 to 2001. See section 6.6 for further details. The estimated coefficients on Migrant Stock for this period are somewhat larger.

7.3  Additional robustness testing

To investigate the robustness of our results we have tried splitting up our sample by High and Low income countries and by English and Non-English speaking countries. The effect of splitting our sample by language is that the estimated coefficients on Migrant Stock fall as compared to our benchmark results, and vary markedly between English and Non-English speaking countries (with the estimated coefficients on Migrant Stock actually being higher for Non-English speaking countries). When we split our sample by income the estimated coefficients are similar to those we present in Table 4.

We have also tried excluding from our regressions all countries from which New Zealand has no migrants. The effect of this on our estimated coefficients for Migrant Stock is negligible.

We include in Appendix Tables 7 and 8 a comparison of our benchmark results when we include the log of the real exchange rate in our regressions against the same sample when the real exchange rate variable is excluded. The effect of excluding the real exchange rate term on our coefficient estimates on Migrant Stock is negligible. The coefficients are, however, considerably higher than our benchmark results presented in Table 4. This again shows the sensitivity of our results to sample selection and may help account for the variety in the predicted effects of migrants on trade in other studies.

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