Swapping Print : The Impact of Immigration and the Internet on International Newspaper Trade

Why is there international trade in newspapers? Why do even very small countries both import from and export to large nations? New trade models founded on transport costs and increasing returns fail to explain the high degree of bilateral trade in cultural goods like newspapers and periodicals. I argue that immigration is complementary to newspaper trade, with small cosmopolitan countries having the largest trade as a percentage of GDP. These predictions are empirically confirmed, with a 10% increase in bilateral immigration inducing a 4.4% increase in newspaper trade between nations. While increased immigration has lead to greater trade, this effect is decreasing in internet usage. The trade-immigration elasticity is 8.5% smaller for high-internet usage countries, reflecting the fact that immigrants increasingly get their foreign news fix online. These results suggest that cultural goods need not be protected from trade as a country's economic presence on the global stage creates a market for its products