Migration, ethnic concentration and international trade growth: the case of Italians in Australia.

Author:Battiston, Simone
Position:Report
 
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Governments and advocates tend to argue that immigration promotes trade between sending and host countries to the benefit of both. The scholarly literature is rather more circumspect. In the present study the authors find that migrants from Italy have made a major contribution to Australia's post-WWII immigration intake, particularly in the 1950s and 1960s. But the data on bilateral trade between the two countries suggest that, while trade has grown, immigration has had a minimal effect. Rather it appears that trade between the two countries has grown in response to general economic growth and to the exigencies of supply and demand.

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Much attention and research has been devoted to the correlation between migration and socio-economic development. (1) International organisations, such as the World Bank, now regard migration as 'the engine for global development' (2) and 'an important way of fighting poverty'. (3) A new, global discourse 'in the whole area of the relationship between migration and economic and social change' is now burgeoning in the literature. (4) Case studies supporting the argument of positive socioeconomic development generated by international migration flows are abundant, especially from a developing country's perspective. Portes and Guarnizo have pointed out, for instance, that returned Dominican Republic migrants from the United States managed to pioneer new business activities in their country of origin based on ideas and skills acquired in the US migration experience. (5) Similarly, no less that half of Turkish migrants returning home from Germany were likely to start their own companies within a few years of their homecoming. (6)

Conversely, developed countries, such as Australia, have high expectations of migration in terms of being able to foster or create trade links between migrant sending and migrant receiving countries, and beyond. A few years ago, a Queensland Government report emphasised the fact that new settlers were welcomed not only because they are capable of delivering 'new ideas, skills and expertise', but also for their potential to 'help create international trade and business links' in 'traditional and new overseas markets'. (7) Recently, the South Australia government expressed an eagerness to support business migrants who were able to demonstrate that they could form export opportunities with their country of origin. (8) In Australia, public policy discourses of the 1990s adopted the concept of productive diversity, defined by Bill Cope and Mary Kalantzis as 'a system of production that uses diversity as a resource'. (9) This identified the migrant cohort as one equipped with the necessary skills and tools to help Australian businesses create or boost their international trade links. (10) Productive diversity was viewed not only in domestic productivity terms--as a means of capitalising on the diversity of the Australian workforce--but also as 'a means to increase overseas trade'. (11)

But scholars have speculated as to whether migration stimulates trade growth. Are migrants likely to boost trade between their host country and their country of origin? Do they play a role as trade mediators? Several studies yield conflicting conclusions as to whether there is a correlation between migration and trade growth. In the mid 1990s in Australia, the Bureau of Immigration, Multiculturalism and Population Research (BIMPR), to give an example, published two reports that sought to assess respectively the contribution of migrants to Australian trade with East Asia in the food industry, and to Australian trade and investment with East Asia in selected service industries. (12) The reports asked: are employees of East Asian birth or descent in the food industry likely to make a positive contribution to Australia's trade and investment in the region because of their language, cultural and business skills? Are the 'East Asia skills' provided by East Asian migrants in selected service industries likely to boost Australia's trade and investment links to East Asia? Rod and Webster's report sought to understand whether the high migrant intake from East Asia to Australia in the 1980s boosted Australia's food exports to the region. Two national surveys, which were supplemented by a set of case studies, led Rod and Webster to conclude that 'there is no link between volume of exports to specific destinations and recent trends in source countries for immigration to Australia'. (13) The authors wrote that even though migrant links were capable of facilitating trade, they 'do not appear to be of sufficient magnitude and importance to transform Australia's export performance'. (14) Dawkins, Kemp and Cabalu's report also relied on a nationwide survey and case studies when seeking to examine the value of the 'East Asia skills' of East Asian migrants in Australia in selected service industries. (15) Their report concluded that, unlike Rod and Webster's, 'ample evidence' was found in survey data and econometric analysis to attest to 'the value of East Asia skills [...] in exporting to East Asia', which were largely provided by East Asia employees'. (16) However, these skills were found to be, in general, 'considerably under-utilised'. (17)

No attempt seems to have been made by scholars to assess the extent to which similar skills (language and cultural skills, personal contacts, knowledge and familiarity with business ethics and practices) exist--and have been used to boost international trade--by immigrants in Australia coming from Southern European countries such as Italy or Greece. Italian migrants and their descendents constitute, for instance, the largest non-English-speaking-background ethnic community in Australia. (18) Is there evidence to suggest that large scale migration from Italy to Australia during the post-war period might have stimulated, or even decisively impacted on, trade growth between Italy and Australia? Further, are Italian ethnic concentrations within Australian states and Territories in a position to influence the bilateral trade relationship between Italy and Australia? (If yes, it should follow that the greater the concentration, the more intense the trade relationship.)

The purpose of this study is to begin remedying the lack of literature that evidences connections (or lack thereof) between migration, ethnic concentration, and international trade growth in the case of Italians in Australia. In this article we find that, based on bilateral trade data, Italian migrant communities in Australia (comprising Italy-born migrants and their descendents) seem to have had a negligible influence on the bilateral trade relationship between Italy and Australia over the postwar period (1950-2005), especially in merchandise exports from Australia to Italy. Further, based on 2001 trade data analysed on a state-by-state basis, it appears that Italian ethnic concentrations within Australian states and territories do not have a strong influence on the bilateral trade relationship that exists between Italy and Australia. Such findings diverge from claims made by those assuming a key contribution made by the Italian-Australian community and its prominent business members during the post-war period to bilateral trade between Italy and Australia. (19)

THE IMPACT OF MIGRATION ON INTERNATIONAL TRADE: SOME EXAMPLES

Rod and Webster's report concluded that migrants may not be in a position to influence Australia's export performance, whereas Dawkins, Kemp, and Cabalu's report claimed that specific skills held by migrant employees can be of great benefit to export activity, although they found that such skills are, in reality, considerably under-utilised. (20) Recent scholarship on the impact of migration on international trade offers some interesting examples of the positive correlation between migration and trade growth. In Canada Keith Head and John Ries have pointed out that thanks...

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