A study on the impacts of immigration network on the export performance of Chinese enterprises

MENG Yinghua 1 CAI Hongbo2 HUANG Jianzhong 1

(1.Shanghai University of International Business and Economics)
(2.Business School, Beijing Normal University)
【Knowledge Link】extended family

【Abstract】This paper assesses the impacts of immigration network on the export performance of Chinese enterprises via their micro trade data. Findings are as follows. (1) Immigration network plays a positive role in exports of Chinese enterprises. Moreover, it plays a role (mainly in extensive margin) by stimulating more enterprises to work on exporting, but exerts rather insignificant impacts on intensive margin. (2) Immigration network is conducive to improving the export probability and export intensity of Chinese enterprises. (3) Immigration network exerts positive influences upon the export probability of enterprises engaged in both processing trade and non-processing trade, but produces more influences upon enterprises working on processing trade. (4) Hong Kong, Macau and Taiwan-owned enterprises and foreign-owned enterprises have more advantages to promote exports by virtue of immigration network. (5) Immigration network plays a most appreciable role in raising the export probability of enterprises in eastern China, but its role in promoting the export probability of enterprises in central and western China is subject to influences of enterprise productivity. (6) Information and communication technologies will further increase the positive impacts of immigration network on the export probability of Chinese enterprises.

【Keywords】 immigration network ; export probability; export intensity;


【Funds】 National Social Science Foundation (15ZDA058) Philosophy and Social Sciences Research of Ministry of Education (13JZD010) National Natural Science Foundation (71403024) Humanities and Social Sciences Research Planning Foundation of Ministry of Education (14YJA790001) Shanghai Education Committee Scientific Research Innovation Project (14YS135) Fundamental Research Funds for the Central Universities

Download this article

(Translated by ZHANG Jun)


    [1]. ① Eaton J. and Kortum S. (2002) asserted that if there had been no geographical trade barriers in international trade, the world trade would have increased by five times. [^Back]

    [2]. ② There is a uniform price in market transactions, whereas if transactions are done though networks, the price will be subject to influences of the relationship between buyers and sellers and there is no uniform price. Besides, generally speaking, homogenous products with a uniform price, are traded through markets, whereas differentiated products with different prices, are traded through networks. [^Back]

    [3]. ③ Five Relationships: blood relationship, region relationship, God relationship, trade relationship and product relationship; some propose to take the education relationship as one of the bases for social relations to come into being. [^Back]

    [4]. Forbes, 138–144 (1994–7–18). [^Back]

    [5]. ⑤ John Naisbitt (1996), Fang Shengchun (1997), Liu Hong (2003), Liu Quan and Dong Yinghua (2003), Liao Xiaojian (2003). [^Back]

    [6]. ⑥ When the number of immigrants to country C is 0, since 0 has no logarithm, we obtain its logarithm by turning 0 into 0.00001. It has been verified in this paper that omitting countries with no immigrants will not change regression results. [^Back]

    [7]. ⑦ In addition to Hong Kong, Singapore also plays a similar intermediary role. However, in the light of the development of such economies as Brazil, India and former Soviet Union, it is difficult for them to enjoy the similar “intermediary” acceleration, exactly because they lack a region like Hong Kong, which maintains intimate contacts with developed economies. [^Back]

    [8]. ⑧ World Chinese Businessmen Website (http://www.wcbn.com.sg) run by the Singaporean government is a representative. Besides, Chinese businessmen also proceed with commercial information communication via such channels as various Chinese websites, BBS and blogs, which are new modes of communication among Chinese businessmen (also known as “network relationship”). [^Back]

    [9]. ⑨ For the convenience of explanation, the cross term here is not ln_ict × ln_oveas_2000, but (ln_ict − X) × (ln_overseas_2000 − Y). X and Y represent the average ICT application level and average immigration network respectively. Put it in another way, we first deduct averages from these variables and use the product of these new variables as cross-term. Undoubtedly, we have performed tests to the original cross term. Even though estimation coefficients of the number of Chinese immigrants and the level of information technology are negative, estimation coefficient of the cross-term of the number of Chinese immigrants and the level of information technology is positive, and they still exert positive impacts on an enterprise’s export probability. Due to limited space, regression results will not be listed here, and whoever interested can ask the authors for the regression results. [^Back]

    [10]. ⑩ Regression results by the two-step method are consistent with these results. Table (9) only lists regression results of using labor productivity to measure enterprise efficiency. We have also tried to use the number of employees to measure enterprise efficiency, and regression results remain unchanged. [^Back]


    [1] Fang, S. Yearbook of the World Chinese Entrepreneurs (世界华商经济年鉴), Yearbook of the World Chinese Entrepreneurs (1997/1998), (1998).

    [2] Feng, J. The New Asian Way (亚洲的新路). Beijing: Economic Daily Press, (1998).

    [3] Forbes, (1994–7–18).

    [4] Liao, X. Ethnic Chinese Economy in the Globalization Era (全球化时代的华人经济). Beijing: The Chinese Overseas Publishing House, (2003).

    [5] Liu H. The Transformation of Chinese Society in Postwar Singapore: Localizing Process, Regional Networking, and Global Perspective (战后新加坡华人社会的嬗变:本土情怀·区域网络·全球视野). Xiamen: Xiamen University Press, (2003).

    [6] Liu, Q. & Dong, Y. Around Southeast Asia (东南亚纵横), (7) (2003).

    [7] Meng, Y. Nankai Economic Studies (南开经济研究), (1) (2008).

    [8] Yu, M. Processing Trade and Productivity of Chinese Enterprises: Theories of Enterprise Heterogeneity and its Empirical Studies (加工贸易与中国企业生产率--企业异质性理论和实证研究). Beijing: Peking University Press, (2003).

    [9] Naisbitt, J. Megatrends Asia (亚洲大趋势). Beijing: Foreign Languages Press, Economic Daily Press; Shanghai: Shanghai Far East Publishers, (1996).

    [10] Bardhan, A. D. and Guhathakurta, S. “Global Linkages of Subnational Regions: Coastal Exports and Interna­tional Networks”, Contemporary Economic Policy, Western Eco­nomic Association International, 22 (2): 225–236 (2004).

    [11] Bartelsman Eric, John Haltiwanger and Stefano Scarpetta. “Cross-country Differences in Productivity: The Role of Allocative Efficiency”, Mimeo (2008).

    [12] Bastos P. and Silva J. “Networks, Firms and Trade”, Journal of International Economics, 87: 352–364 (2012).

    [13] Ching, Hsianghoo S. and Li-Lu Chen. “Links be­tween Immigrants and the Home Country: The Case of Trade be­tween Taiwan and Canada”, in Hirotada Kohno, Peter Nijkamp and Jacques Poot eds, Regional Cohesion and Competition in the Age of Globalization (Cheltenham: Edward Elgar), 185–198 (2000).

    [14] Crozet, M., Head, K. and Mayer, T. “Quality Sorting and Trade: Firm-level Evidence from French Wine”, Re­view of Economic Studies, Forthcoming (2011).

    [15] Curtin, Phillip D. Cross-Cultural Trade in World History, London: Cambridge University Press (1984).

    [16] Dunlevy, J. A. and Hutchinson, W. K. “The Im­pact of Immigration on American Import Trade in the Late Nine­teenth and Early Twentieth Century”, Journal of Economic His­tory, 59 (4): 1043–1062 (1999).

    [17] Dunlevy, J. A. and Hutchinson, W. K. “The Pro-Trade Effects of Immigration on American Exports during the Period 1870 to 1910”, Vanderbilt University, Nashville, TN, Working Paper (2001).

    [18] Dunlevy, J. A. “The Influence of Corruption and Language on the Pro-Trade Effect of Immigrants: Evidence from the American States”, Review of Economics and Statistics, 88 (l): 182–186 (2006).

    [19] Eaton, J. and Kortum, S. “Technology, Geogra­phy and Trade”, Econometrica, 70 (5): 1741–1779 (2002).

    [20] Eaton, J., Kortum, S. and Kramarz, F. “An Anat­omy of International Trade: Evidence from French Firms”, Econometrica, 79 (5): 1453–1498 (2011).

    [21] Feenstra Robert, Zhiyuan Li and Miaojie Yu. “Ex­ports and Credit Constraints under Incomplete Information: Theory and Evidence from China”, mimeo, University of California, Davis (2011).

    [22] Felbermayr G. J., Jung B. and Toubal F. “Eth­nic Networks, Information, and International Trade: Revisiting the Evidence”, Annals of Economics and Statistics, 41–70 (2010).

    [23] Felbermayr G. J. and Toubal F. “Revisiting the Trade-Migration Nexus: Evidence from New OECD Data”, World Development, 40 (5): 928–937 (2012).

    [24] Girma, Sourafel and Zhihao Yu. “The Link be­tween Immigration and Trade: Evidence from the UK”, Notting­ham, University of Nottingham, Centre for Research on Globalization and Labor Markets, Research Paper No 2000/23 (2000).

    [25] Gould, David M. “Immigrant Links to the Home Country: Empirical Implications for US Bilateral Trade Flows”, Review of Economics and Statistics, 76 (2): 302–316 (1994).

    [26] Greif, Avner. “Contract Enforceability and Eco­nomic Institutions in Early Trade: The Maghribi Trades Coali­tion”, American Economic Review, 83 (3): 525–548 (1993).

    [27] Hatzigeorgiou, A. “Does Immigration Stimulate Foreign Trade? Evidence from Sweden”, Journal of Economic Integration, 25 (2): 376–402 (2010).

    [28] Heckman, James J. “Sample Selection Bias as a Specification Error”, Econometrica, 47: 153–161 (1979).

    [29] Helpman, E., Melitz, M. and Rubinstein, Y. “Es­timating Trade Flows: Trading Partners and Trading Volumes”, Quarterly Journal of Economics, 123 (2): 441–487 (2008).

    [30] Herander, M. G. and Saavedra, L. A. “Exports and the Structure of Immigrant-Based Networks: The Role of Geographic Proximity”, The Review of Economics and Statistics, 87 (2): 323–335 (2005).

    [31] Hsieh, C. T. and Klenow, P. J. “Misallocation and Manufacturing TFP in China and India”, Quarterly Journal of Economics, 124 (4): 1403–1448 (2009).

    [32] Lawless, M. “Deconstructing Gravity: Trade Costs and the Extensive and Intensive Margins”, Canadian Jour­nal of Economics, 43 (4): 1149–1172 (2010).

    [33] Melitz, M. “The Impact of Trade on Intra-indus­try Reallocation and Aggregate Industry Productivity”, Econometrica, 71 (6): 1695–1725 (2003).

    [34] Peri G. and Requena F. “The Trade Creation Ef­fect of Immigrants: Testing the Theory on the Remarkable Case of Spain”, NBER Working Paper 15625 (2009).

    [35] Rauch, James E. “Trade and Search: Social Capital, Sogo Shosha and Spillovers”, NBER Working Paper No. 5618 (1996).

    [36] Rauch, James and Alessandra Casella. “Overcom­ing Informational Barriers to International Resource Allocation: Prices and Group Ties”, NBER Working Paper No. 6628 (1998).

    [37] Rauch, James E. and Vitor Trindade. “Ethnic Chinese Networks in International Trade”, Review of Economics and Statistics, 84 (1): 116–130 (2002).

    [38] Parsons Christopher. “Do Migrants Really Foster Trade? The Trade-Migration Nexus, a Panel Approach 1960–2000”, The World Bank, Policy Research Working Paper 6034 (2012).

    [39] Verhoogen, E. Trade, “Quality Upgrading and Wage Inequality in the Mexican Manufacturing Sector”, Quarter­ly Journal of Economics, 123: 489–530 (2008).

    [40] Wagner, D., Head, K. and Ries, J. “Immigration and Trade in the Provinces”, Scottish Journal of Political Econo­my, 49 (5): 507–525 (2002).

    [41] Woidonbaum M. and S. Hughes. The Bamboo Net­work: How Expatriate Chinese Entrepreneurs are Creating a New Economy Superpower in Asia, New York: Matrin Kessler Books (1996).

This Article


CN: 11-1235/F

Vol , No. 10, Pages 54-64

October 2015


Article Outline



  • 1 Introduction
  • 2 Literature review
  • 3 Heterogeneous trade and information network: theoretical model
  • 4 Data specification
  • 5 Immigration network and China’s export trade: extensive margin and intensive margin
  • 6 Immigration network and China’s export trade: data analysis at the enterprise level
  • 7 Conclusion
  • Footnote