Do refugee-immigrants affect international trade? Evidence from the world's largest refugee case

This paper investigates the impact of refugees on a developing host country's bilateral trade with the source country using a Vector Error Correction model and Granger causality tests. Using the largest case of refugee settlements in the world, we look at how refugees moving over several decades from Afghanistan to Pakistan have affected bilateral trade both directly and indirectly. We find that changes in Afghani refugees do not Granger cause movements in bilateral trade between Afghanistan and Pakistan but foreign aid to Afghanistan does Granger cause trade between the two countries.