Skilled Labor Immigration and External Trade in Malaysia: A Pooled Data Analysis

Author： Hong Tan Chuie Santhapparaj A. Solucis

Publisher： Brill

ISSN： 1569-1497

Source： Perspectives on Global Development and Technology, Vol.5, Iss.4, 2006-11, pp. : 351-366

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Abstract

This paper attempts to further the immigrant-link literature by applying, for the first time, gravity models to Malaysia. Specifically the paper seeks to quantify the impact upon Malaysia's bilateral trade flows of ASEAN and non-ASEAN skilled immigration, and to identify the underlying mechanisms underpinning this relationship. The results indicate that skilled immigration positively affects both the imports and exports of Malaysia. Immigrant-link is stronger between Malaysia and ASEAN countries than to non-ASEAN countries. The magnitude of the elasticity with respect to trade is larger for imports than for exports. Skilled immigrants' demand for native products outweighs the business-links formed between Malaysian trading partners.