Migrant Networks and Trade: The Vietnamese Boat People as a Natural Experiment

The role of migrant networks in reducing the information frictions that inhibit international trade has been discussed extensively. Yet the causality from migration to trade creation has not been conclusively established. This paper provides cogent evidence of the causal pro-trade eect of migrants by drawing upon the exodus of the Vietnamese Boat People to the US. This episode represents an ideal natural experiment as it combines a large immigration shock with a concurrent trade embargo in tandem with an exogenous allocation of Vietnamese migrants across US States. Following the lifting of the trade embargo in 1994, exports to Vietnam were higher and more diversied from those US States with larger Vietnamese populations, itself the result of larger refugee inows 20 years earlier. A 10% increase in a Vietnamese State population is associated with a ratio of export to Vietnam over GDP that is 1.9% higher. Importantly, we nd low-skilled migrants to be as instrumental as the high-skilled in fostering trade.