Immigrants' Networks and Trade: Evidence from Brazil

Advisor: Juliano Assunção

Co-advisor: Thierry Verdier

This paper investigates the impact of immigrants' (foreigners) links with their home-country on Brazilian imports and exports of goods. According to the literature, immigrants affect positively both imports and exports because they possess superior knowledge of home country markets aspects, language skills and business contacts that mitigate informal barriers to trade. However, most of the published studies focused on evaluating these matters in developed economies contexts. Differently, to test the empirical significance and magnitude of these effects we use Brazilian detailed data (unexplored by literature) from 2000 to 2016 at the municipality and worker level to estimate augmented gravity equations. According to the results, municipalities with relatively more immigrants from a particular country (especially the ones holding management positions in international trading firms) trade more with this country. The results also indicate larger effects for differentiated products and for countries with different religious beliefs and institutions from Brazil.