Each foreign-born worker employed in Sweden increases exports to their native country, a new study reveals, while a 10-percent increase in Sweden's immigration would boost national exports by five percent.
The study, conducted by Lund University economist Andreas Hatzigeorgiou and Örebro Univesity economist Magnus Lodefalk, examined around 12,000 Swedish manufacturing companies and their trade with about 170 countries, comparing the companies' exports with employees' homelands.
The research showed that when Swedish manufacturing companies employ foreign-born workers, exports to the employees' countries of origin increase, with researchers saying foreign-born workers are the key to overcoming modern trade barriers.
"In today’s globalized economy it’s not tariffs and quotas that impede firms’ trade, but language barriers and cultural barriers," Hatzigeorgiou told The Local. "You need to have the right contacts and access to the right networks in the countries you want to export to. So if you have a smaller Nordic firm which wants to export to the Middle East or Asia or Latin America, it is easier if you have employees who know the language and the culture."
Hatzigeorgiou, who also serves as an advisor to Swedish Minister of Trade, said he did not find the results surprising.
"Cultural barriers are more and more important in trade, and immigration has a natural role to play within this context."
"Those calculations say that if you were to increase the total stock of immigrants in Sweden by ten percent, the average estimated effect on exports would correspond to 4.5 percent," Hatzigeorgiou said. "That's on the whole, looking at large and small firms alike."
Another part of the study focused on the effects on individual firms, where the impact was even larger.
"On average, each manufacturing firm in Sweden that hires an additional immigrant increases their export to that country by one percent, said Hatzigeorgiou.
The study also revealed that most-educated immigrants are more likely than lower-skilled workers to impact trade, but the amount of time they have spent in Sweden also plays a large role.
"Education and skills are of course important for the ability of the immigrants to disseminate information within the companies where they are hired," Hatzigeorgiou told The Local. "But also, time away from their home country can be a measure of how fresh and up-to-date their networks in their home countries are. Immigrants who have up-to-date contacts in their home countries in combination with some useful skills facilitate exports the most."
The study is one of many recent developments in a discourse on immigration and labour. A July report by the Swedish Employment Agency (Arbetsförmedlingen) stated that immigrants are the 'key' to the job market's future. The Swedish Pensions Agency (Pensionsmyndigheten) also recently launched a campaign to educate foreign-born workers about their rights to Swedish pensions.