Immigrant effect in melting pot and multicultural societies: a comparison between the USA and Canada
| Pages | 23-41 |
| DOI | https://doi.org/10.1108/15587891111100787 |
| Date | 18 January 2011 |
| Published date | 18 January 2011 |
| Author | Majid Ghorbani |
| Subject Matter | Strategy |
Immigrant effect in melting pot and
multicultural societies: a comparison
between the USA and Canada
Majid Ghorbani
Abstract
Purpose – This study aims to investigate the role of socio-economic institutions on immigrant effect (IE).
The IE is to be empirically tested in two multi-ethnic societies of the USA and Canada; comparing it ina
melting pot and a multicultural approach. This effect is also separately to be examined in several
provinces and states, each with its own social setting, in both countries.
Design/methodology/approach – The study examines data mainly collected from the census,
immigration, and trade/export data in both countries, for the six-year period of 2000-2005. The paper
compiles data in a panel data format on immigrant groups and trade with the country of origin of 27 (US)
and 29 (Canada) immigrant groups.
Findings – The analysis implies findings almost the opposite of what was expected; immigrant effect
exists in a melting pot and is not significant in a multicultural society.
Research limitations/implications – The study is limited to two societies, and still needs to be tested in
other multicultural and melting pot countries across the globe.
Practical/ implications – While immigrants to Canada identify themselves more strongly with their new
home than immigrants to the USA, Canada in general is not fully utilizing their potential in boosting
foreign trade with the countries of origin of these immigrants. The paper also addresses some practical
implications of the study for managers interested in better exploiting the benefits of immigrant effect.
Originality/value – Immigrant effect and its values in two very large immigrant recipient countries with
very dissimilar social and institutional settings are systematically investigated. Based on the results of
this investigation a number of implications for practitioners and policy makers is suggested.
Keywords Immigration, Multicultural societies, International trade, Canada, United States of America
Paper type Research paper
Introduction
Researchers are interested to know why the level of trade between some countries
increases, while this level might decrease between other countries. One of elements recently
named by many researchers is the effect of immigrants (e.g. Buch et al., 2006; Chung and
Enderwick, 2001; Gould, 1994) or presence of certain ethnicity (e.g. Rauch and Trindade,
2002) on the amount and direction of trade. However, this effect remains under-researched
in many areas such as the effect of socio-political system of the host country on immigrant
effect. For instance, does a host country culture affect the degree of immigrants’ involvement
in trade and how? Do immigrants have varying impacts on trade in countries and regions
with different cultures? What kind of cultural setting and social system would foster trade
through immigrants? Which cultural environment would hinder trade through immigrants?
Many studies have investigated the impact of immigration on the level of trade, import and
export (Dunlevy and Hutchinson, 1999; Girma and Yu, 2002; Head and Ries, 1998; Tadesse
and White, 2008; Wagner et al., 2002; White, 2007), but there is a dearth of studies that
compare these effects in two different types of societies. This study answers most of these
questions by comparing melting pot and multicultural societies in their effect on the
DOI 10.1108/15587891111100787 VOL. 5 NO. 1 2011, pp. 23-41, QEmerald Group Publishing Limited, ISSN 1558-7894
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JOURNAL OF ASIA BUSINESS STUDIES
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PAGE 23
Majid Ghorbani is a PhD
candidate at Segal
Graduate School of
Business, Simon Fraser
University, Vancouver,
Canada.
relationship between the presence of ethnicities with the level of trade between the host
country and country of origin.
With improvements in technology in the areas of communication and transportation we are
observing a higher degree of mobility around the world (Rauch, 2001). Between 2000 and
2005, while the number of international migrants stocks increased by close to 8 percent
(O
¨zden and Schiff, 2006), the total traded merchandise increased by approximately 62
percent (WTO, 2007). While there are many elements that affect the level of international
trade, it is highly possible that immigrants are one of those factors that have larger effect on
trade than previously anticipated (e.g. Buch et al., 2006; Chung and Enderwick, 2001;
Rauch and Trindade, 2002). As migration from developing countries to industrialized
countries and in general from poorer countries to more advantageous countries increases,it
is important to find out whether countries with melting pot setting or countries with
multiculturalism system could take more advantage of immigrant effect.
This investigation includes two separate, but related studies. In the first study, we will
compare and contrast the immigrant effect in two of the largest host countries to immigrants
and different ethnicities: the United States (USA) and Canada. The former being the best
example of a melting pot society and the latter being a good example of a multicultural
society. In the second study, to test the generalizability of findings in both countries, we will
analyze the immigrant effect in five states from the USA and five provinces from Canada. The
two studies use a basic gravity model to measure the effect of immigrants from various
countries on the level of trade with the above-mentioned countries and their
states/provinces. A cross-sectional time-series in the form of panel data methodology will
be employed to test these models. This methodology allows a larger sample size for
provinces and states compared to the national level.
What makes the two countries interesting is that the USA as the single largest recipient of
immigrants is a melting pot society, whereas Canada, known as one of the best countries in
terms of integration of immigrants, undertakes multiculturalism, a term that was coined by
Canada (Citrin et al., 2001). Furthermore, in 2005, the world’s largest importer and second
largest exporter of merchandise, the USA, imported 16 percent and exported 10 percent of
the world import/export merchandise (WTO, 2006). The ninth largest country both in terms of
export and import of merchandise, Canada, imported 3.0 percent and exported 3.4 percent
of the world merchandise (WTO, 2006). It may not be a coincident that, in 2005, the USA,
with 20.2 percent of total stock, was the largest and Canada, with 4.2 percent of total stock,
was the seventh largest host to international migrants (UN, 2006).
Thisstudy reviews some of the literature on immigration, ethnic identity,their role in international
trade and factors effecting the latter to explain the phenomenon. The results of this study
indicate two major findings among several minor ones. The first one is that, indeed immigrant
effect in a multicultural society and melting pot are different in a surprising way. The second
finding is that factors such as language and history may play different roles than expected. In
the discussion section, such unexpected discrepancies are further discussed and attributed
to differences in cultures and the way immigrants are treated/received in each society.At the
end, implications for and suggestions for practitioners and policy makers are presented.
Immigrant effect and trade
Several factors could affect the level of trade between two countries. These factors are
derived from history,socio-political and economical elements that exist within or between the
two countries. One of the elements, presence of people from a country (hereafter: country of
origin or COO) in the other country (hereafter: country of residence or COR), is the center
point of this discussion. In this section we expand and explain the role and effect of this
factor, as well as others that need to be taken into consideration.
Immigrant effect is the effect immigrants could have on the level of trade between their COO
and COR as a result of living in the COR (Chung and Enderwick, 2001; Wagner et al., 2002).
This effect has been measured or predicted using different types of theories such as
internationalization and networks (e.g. Hadley and Wilson, 2003), transaction cost economy
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