International student flows for university education and the bilateral market integration of Australia

Study at a foreign university can be an important way of developing international human capital. We investigate factors affecting international student flows for higher education and their consequences for bilateral market integration in Australia. Estimation results demonstrate that income, cost competitiveness, migration network effects and other education pathways increase the demand for tertiary education. Our results show that university study, inter alia, is an important determinant of bilateral trade between Australia and the student’s home country.