Quantifying the trade-migration nexus of the enlarged EU

This paper attempts to further the immigrant-link literature by applying, for the first time, this methodology to the European Union. Specifically the paper seeks to evaluate the robustness of the findings from this strand of literature; to quantify the impact upon EU-15 bilateral trade flows, of East-West European immigration, and to identify the underlying mechanisms underpinning this relationship.

The results indicate that Eastern European immigrants exert a positive influence on both EU-15 imports and exports. It is predicted that a 10% rise in Eastern European immigration will increase EU-15 imports from these countries by 1.4% and EU-15 exports by 1.2%. These results indicate that immigrants' demand for native products outweighs the increase in trade associated with immigrants forming business-links between European trading partners.