The Effect of Emigration on Foreign Trade: The Case of Afghanistan (2001-2019)

Abstract

Immigration is one of the factors affecting macroeconomic variables, including foreign trade. Considering the large number of Afghan migrants throughout the world, this study sought to investigate the effect of Afghan migrants on the imports and exports of this country during 2001-2019, using the semiparametric augmented gravity model for the empirical purpose of the study. The results of the semiparametric estimation of the fixed effects model have indicated that the role of emigration on the volume of exports and imports of Afghanistan has a non-parametric effect. That is, on some levels of emigration, the increase in the number of immigrants abroad has increased trade and confirms the existence of a complementary relationship between labor migration and trade, contrary to the theory of Heckscher-Ohlin, but at other levels, the accumulation of immigrants has caused a decrease in the volume of Afghanistan's imports and exports. This result is consistent with Heckscher-Ohlin 's theory. Of course, it can be due to the integration of immigrants in the host society and the disconnection with the destination countries, the difference in skills level and information of immigrants.