Bridging barriers - Pro-trade effects of immigration on Swedish exports

Sammanfattning: This study examines the pro-trade effects of immigration on Swedish exports. Beginning in the theory that immigrants through their unique set of networks and knowledge can facilitate international trade and bridge informational barriers to trade, this study will estimate the immigration effect on exports for Sweden. Unlike studies in similar settings, this paper applies a Pseudo poisson maximum likelihood estimation, which is preferential to the log-linear OLS, and have not before been applied in studies for Sweden. Further, this paper tests if institutional variables work as a good proxy for estimating informational barriers. The results show that immigration indeed have significant positive effects on Swedish exports; a ten percent increase in immigration results in 1,4 to 3,7 percent increase in exports. However, the model fails to capture and estimate the theoretical mechanisms behind immigrants’ network and information effect on Swedish exports.