Trade and Portuguese Immigration

This manuscript examines the link between trade and migration flows using a gravity model for the period 1995-2007 between Portugal and European Union countries. We also include in our sample the Portuguese speaking countries (PALOPS), i.e., ex-colonies. Globalization drives people to migrate, in some countries, immigration being more pronounced las in Portugal, in last decade, this country receiving foreign residents. This is a new reality to Portuguese economy. For many years, the Portuguese have emigrated to European countries, the United States of America and other countries. Currently, Portugal is witnessing a reverse trend, Brazilian, Cape Verde, Ukrainian and Romanian communities choose Portugal as a destination country. We find evidence that immigration has a positive influence in bilateral trade. We also introduce economic size and regional trade agreements (RTA); these proxies confirming a positive impact of bilateral trade. These results show that the gravity model can explain the pattern of bloc’s trade. Our results also confirm the hypothesis that trade increases if the transport decreases. Classification-JEL:F14,F22Keywords:Trade, Immigration, Gravity model; PortugalJournal:Romanian Journal of EconomicsPages:38-48Volume:31Issue:2(40)Year:2010(XX)Month: DecemberFile-URL: http://www.revecon.ro/articles/2010-2/2010-2-2.pdf