From human capital externality to entrepreneurial aspiration: Revisiting the migration-trade linkage

The economics literature tends to view the positive impact of migration on trade as a product of human capital externalities. Drawing on the sociological perspectives of immigrant adaptation, we instead focus on entrepreneurial aspirations that drive immigrants into trade-creation activities. Considering levels of migrant educational attainment while applying entrepreneurship theory to China as the source of both migrants and traded goods, we propose and find support for our key hypothesis that the pro-trade effect of migrant networks is greater among low-skilled than high-skilled immigrants, thus adding precision to existing knowledge of how immigrants positively influence trade.