This dissertation consists of three chapters and focuses on the fields of applied econometrics, international trade, the economics of migration, and regional economics.

Chapter 1 demonstrates how applied researchers can develop, select, and validate Shift-Share Instrumental Variables (SSIVs) in their studies. It introduces a novel SSIV Search Method to estimate the causal effect of interprovincial services trade on interprovincial goods trade in Canada. Using the Poisson Pseudo Maximum Likelihood (PPML) estimator within the gravity model, the results reveal a significant causal effect of services trade on goods trade. SSIV variants with lagged disaggregate shocks and shares outperform literature-suggested SSIVs in empirical validity, predictive accuracy, and bias reduction. Machine Learning techniques (such as Gradient Boosting and Random Forest) and Monte Carlo simulations validate the robustness of these instruments.

Chapter 2 examines the bidirectional causality between interprovincial trade and migration within Canada. It develops 80 SSIVs for interprovincial trade and 4 SSIVs for interprovincial migration to address endogeneity. Using the PPML estimator, the analysis shows that trade (both aggregate and disaggregate), particularly services trade, has a stronger influence on migration than migration does on trade. These findings suggest that reducing trade barriers could infl uence internal migration patterns in Canada.

Chapter 3 explores the relationship between trade and migration at both interprovincial and international levels. It introduces modi ed SSIVs as new instruments and nds that both interprovincial and international trade attract migration. The impact of interprovincial trade on interprovincial migration is greater than that of international trade on international migration to Canada. Exports show similar impacts on attracting migrants interprovincially and internationally. Random Forest results demonstrate the superior predictive power of Modified SSIVs compared to traditional ones. This chapter also recommends policies for provinces aiming to attract both interprovincial and international migrants.