By Victoria Hines
A
discussion
paper released by the Centre for Economic Performance suggests that “immigrants
promote exports of final services, both overall and particularly to their
countries of origin.” Moreover, the effects appear to be even stronger when
trading partners share cultural and institutional similarities. A potential
explanation for this finding is that immigrants reduce exporting or importing
costs of services by helping their home country overcome cultural and
institutional barriers with foreign markets. Not only are trade costs reduced,
but immigrants can also increase productivity by contributing their
specialization and creativity.
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