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Migrant Networks as substitute for institutions: Evidence from Swiss trade

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Abstract

This paper uses an untapped dataset on Swiss immigration and a novel instrumental variable to test three channels through which migrants promote trade. The main finding is that migrant networks are an effective substitute for formal institutions in facilitating trade. The effect takes place entirely on the extensive margin, suggesting migrant networks may be reducing fixed entry costs characterized by corruption.

Suggested Citation

  • Pierre-Louis Vézina, 2010. "Migrant Networks as substitute for institutions: Evidence from Swiss trade," IHEID Working Papers 03-2010, Economics Section, The Graduate Institute of International Studies.
    • Handle: RePEc:gii:giihei:heidwp03-2010
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    Keywords

    trade; migration; corruption;
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