Immigration strengthens exports

Immigration is strengthening the international trade of Danish businesses. According to new research, their exports in particular benefit from foreign labour.

It is well-known that Denmark is looking for foreign labour within a number of sectors, but now a new PhD thesis from Aarhus University, Business and Social Sciences, documents the advantages associated with immigration for the exports and imports of businesses.

The greatest effect is seen on exports where results show that the more foreign workers a business employs, the higher the exports to the native countries of these foreign employees. The new employees simply give access to a larger international customer base.

More precisely, exports to the foreign employees’ native market increase by 1.7% for each foreign employee a company hires.

PhD student Sanne Hiller, who conducts research into international trade and labour movement, is the researcher behind the sensational findings. Her findings are based on employee and employer data from 7,143 trading companies between 1995 and 2005.

- This may not seem like a lot, but it is worth noting that this figure is per individual employee, which means that it adds up quite quickly, says Sanne Hiller.

It would seem that the foreign employees do not directly impact the imports of Danish businesses. However, if there is a high level of immigration in the company’s local area, this will have a positive impact on the company’s imports.

Letting in knowledge
The new findings indicate that it would be an advantage to reduce barriers to labour immigration to Danish companies:

- If you do not let people in, you cannot let knowledge in, says Sanne Hiller. And she elaborates:

- Foreign employees possess an enormous amount of specific knowledge about their native markets which comes at a cost to our competitors. Foreign labour may thus become a big competitive advantage for Danish companies.

However, this requires a management that is able to make the most of the knowledge possessed by the foreign employees:

- The company should, of course, recognise the fact that everyone brings with them specific and unique knowledge and that diversity is therefore a virtue in itself if you want to ensure that foreign employees are well-integrated.


PhD student Sanne Hiller
Aarhus University, Business and Social Sciences
Department of Economics and Business

Tel.: +45 8716 4669