The effect of international migration on foreign trade: An empirical analysis for Turkey

The aim of this thesis is to investigate the effect of international migration on foreign trade in Turkey. The study focus on the trade of Turkey with 125 countries during the period from 2013 to 2016. For this purpose panel data method is used in the study. Analyzes are made primarily for models that include all countries. Then, models are re-estimated with two categories, namely OECD member countries and developing countries. The variables in the models are determined by the augmented gravity model. Exports, imports and total trade variables are used as foreign trade variables. The determinants of foreign trade are specified as immigration, GDP, distance, nominal exchange rate and population. There are two main results of the study. First, the effects of international migration on exports, imports and foreign trade are positive in the models for both OECD countries and developing countries. Second, the positive impact of international migration on imports is greater than the impact on exports in Turkey. This result indicate that preference effect is more dominant than network effect in Turkey. There is also a need for policies to encourage more qualified immigrants to come to Turkey. Key words: International Migration, Foreign Trade, Panel Data Analysis, Augmented Gravity Model