In this paper I analyse the export behaviour of firms located in different Central European countries (Austria, Hungary, Czech
Republic and Slovakia) with respect to migration. Ever since the seminal article by Gould (1994) on immigrant links to their
home country and due to empirical research following his contribution, it is a well established result that immigrants from
a particular country spur exports to and imports from that destination. Chaney (2008) shows that a decrease in fixed costs
of exporting increases the number of exporters (extensive margin), whereas a reduction in variable costs also increases the
volume exported by each exporting firm (intensive margin). Empirical contributions using firm-level data focus on various
aspects influencing costs of exporting (like spillover effects of nearby firms or financial factors), but leave out the issue
of migration. I combine detailed information coming from a questionnaire conducted among 8,300 firms on the export behaviour
to different countries with regional data on migration from the European Labour Force Survey (LFS). I find evidence that both
the propensity to export and – to a much smaller extent – the volume of sales of exporting firms to a particular destination
is higher for firms located in regions with a larger number of immigrants from that country. I conclude that migrants mainly
reduce fixed costs of exporting.
Keywords:Firm-level data, Export destinations, Immigrants, Margins of trade
Forschungsbereich:Regionalökonomie und räumliche Analyse