The Pro-Trade Effects of Immigration on American Exports During Period 1870 to 1910

This paper examines the impact of a stock of immigrants in the United States on American exports to their home country during the period 1870 to 1910.Our data set spans the exports of 44 commodities to 17 countries observed at 5 year intervals.We use a modified gravity model to examine this immigrant stock-export relationship and find that United States exports were greater to a country due to the presence of immigrants from that country.The estimated strength of the effect is found to have varied across "Old" Europe, "New" Europe, and non-Europe groupings of the trading partner countries.Exports were also generally found to have been greater to other English-speaking countries, and to countries with per capita incomes similar to the United States.This relative per capita income effect became stronger during the latter part of the period, whereas the immigrant stock effect diminished after 1885. The Pro-Trade Effect of Immigration on American Exports During the Classical Liberal PeriodIn a recent contribution, James Dunlevy and William Hutchinson investigated the pro-trade effects of immigrants to the United States over the period from 1870 to 1910. 1That paper was limited to the link between immigration and American import trade.In this paper we complete the story by conducting a similar investigation of the immigrant link to American exports during that same period.The impetus for both the earlier study and for this one comes from two papers, one by David Gould and another by Keith Head and John Ries that investigated the effects of current immigration on the imports and exports of the United States 2 and of Canada, 3 respectively.The reasons for anticipating an impact on trade of greater immigration are developed in these papers, and their relevance to the late nineteenth and early twentieth century American experience was discussed in our earlier paper.Briefly, it is argued that immigrants by their familiarity with both their origin and host countries perceive opportunities overlooked by those without a multinational perspective, that immigrant entrepreneurs can more easily engage in transactions with their compatriots in the origin country because of shared values, language, and trust, 4 and, for the import relationship, that immigrants provide a source of demand in their host country for 1 James A. Dunlevy and William K. Hutchinson, "Impact of Immigration"2 David Gould, "Immigrant Links"3 Keith Head and John Ries, "Immigration and Trade Creation"4 Recently, George Borjas (1999), in discussing externalities that might be generated by immigrants, noted that "American firms [potentially might] gain, because they now use the social and information networks that link immigrants and the source countries to better market their products in foreign markets."(p.96).

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