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Abstract

This paper investigates the effect of immigration on trade flows using Zambia as a case study. Using panel data for the period 1990-2018, the relationship is formulated using a gravity model and estimated using the Poisson Pseudo Maximum Likelihood Estimation (PPML). The model estimated the influence of immigration on total trade, imports and non-traditional exports (NTEs), while controlling for whether or not the trade partner has a trade agreement with Zambia. The results show a positive association between immigration and total trade, imports and NTEs. It points to the importance of social networks in fostering trade flows across countries and that trade costs matter.

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