The US Experience Since 1945
Chapter 10: Variation in the Immigrant–Trade Link
Having established a positive influence of immigrants on US–home country trade in Chapter 9, we continue our examination of the hypotheses listed in Chapter 3. First, we consider whether or not variation exists in the pro-trade influences of immigrants across the pre-1968 and post1968 home country cohorts. As discussed earlier, it is expected that the recency effects of immigrants from post-1968 home countries are greater than the primacy effects of immigrants from pre-1968 home countries. We then examine variation in immigrant–trade effects across a number of disaggregated trade measures. The use of such dependent variable series provides for a more detailed understanding of how immigrants affect trade and affords the opportunity to consider whether immigrants only affect trade when it is already taking place (that is, a trade-intensification effect) or if they also exert trade-initiation effects when US–home country trade is not occurring. 10.1 PRE-1968 AND POST-1968 HOME COUNTRY COHORTS The history of US immigration policy was reviewed in Chapter 4 and immigrants’ home countries were categorized in Chapter 5, based on whether or not entry preference was afforded historically, as either pre1968 home countries or post-1968 home countries. It was then shown in Chapter 6 that pre-1968 home countries are, on average, significantly different from the average home country in the post-1968 cohort in terms of both hard and soft trade-facilitating infrastructure. The existence and quality of such infrastructure are directly related to trade-related transaction costs. When infrastructure is lacking or of lower quality, transaction costs...
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