Migration and FDI: The role of job skills

Cuadros, Ana; Martín-Montaner, Joan; Paniagua, Jordi

doi:10.1016/j.iref.2018.09.007

Cited by 28 publications

(26 citation statements)

References 42 publications

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“…First, the gravity equation for trade has been founded on solid theoretical grounds since [71] and [72]. Following trade developments, studies such as [73–75] and [76, 77] have developed theoretical models that result in empirical equations for the case of FDI. Second, empirical advances in the estimation of the gravity equation have led to estimations that minimize known biases such as the abundance of zeros and the heteroscedasticity in the error term [78].…”

Section: Methodology and Data Overviewmentioning

confidence: 99%

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Foreign Direct Investment in oil-abundant countries: The role of institutions

2019

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The present work reassesses the impact of good governance and democracy on Foreign Direct Investment (FDI) in oil-abundant countries. To this end, we estimate the effect of host countries’ institutions on greenfield FDI, using a gravity equation for a dataset that covers 182 countries during 2003-2012. Our findings confirm that compliance to rule of law, lack of corruption, political stability and democracy could boost new FDI links through the extensive margin. Our results could not rule out the “oil curse”, meaning that oil producers attract fewer new greenfield projects than similar countries without oil. Unlike other studies, we show that the impact of institutions is not necessarily undermined by the presence of natural resources.

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Section: Methodology and Data Overviewmentioning

confidence: 99%

“…Recent literature has stressed the influence of migration on FDI and particularly on greenfield FDI [76, 77]. The diaspora of MENA country migrants in particular, and oil-producing countries in general, is non-negligible, and therefore might be a source of omitted variable bias.…”

Section: Robustness and Sensitivity Analysismentioning

confidence: 99%

Foreign Direct Investment in oil-abundant countries: The role of institutions

2019

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“…Migrants can influence productivity growth, both in the receiving and sending countries through several channels, such as skill and diversity spillovers, remittances, age structure, entrepreneurial skills (Brunow et al, 2015;United Nations, 2011). Also, higher rates of migrants with management skills can positively influence foreign direct investments in receiving country (Cuadros et al, 2019).…”

Section: Introductionmentioning

confidence: 99%

The Impact of Eu Immigration on Economic Growth Through the Skill Composition Channel

Șerban

Aceleanu

Dospinescu

et al. 2020

Technological and Economic Development of Economy

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The paper aims to examine the new trends of immigration and their implications on the economy of the host country, particularly on economic growth and unemployment. As the effects of aging population can be felt in many countries, especially in developed ones, migration will continue to play an increasing role in the economic growth of all countries, either sending or receiving. Given the changes in migration trends and migration policies, the impact of the process should be revised. One of the main characteristics that significantly impacts economic growth is the education and skill level of immigrants. In the light of this fact, the research aims to identify the impact of immigration on growth through the skill composition channel. We analyzed the impact of skilled and unskilled immigration on growth, also including the unemployment rate as a relevant factor for the labour market. We estimated six dynamic panel models using the system of generalised method of moments (GMM) to take into account the risk of an endogeneity bias of the migration variables. The results indicate a positive and significant effect of skilled immigration on the economic growth of the receiving country. The results also point to a 1.3 percent β-convergence rate consistent with the values found in the convergence literature which are around 2 percent.

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“…A closely related strand of literature has used a mostly reduced-form approach to establish a link between immigration and trade (Gould, 1994;Hiller, 2013), immigration and FDI activity (Burchardi et al, 2019;Cuadros et al, 2019;Glennon, 2018;Javorcik et al, 2011;Wang, 2014;Yeaple, 2018), and the interrelations between migration, trade, and FDI (Aubry et al, 2018). I contribute to this literature by providing new facts on these links as well as building and estimating a quantitative model that allows me to properly quantify the aggregate implications of immigration for MNEs production and for welfare.…”

Section: Introductionmentioning

confidence: 99%

“…Incorporating immigrants in a gravity framework through the FDI costs has been a common strategy in the literature. See for exampleCuadros et al (2019) andAubry et al (2018), among others. All of my qualitative results still hold if we consider ν = 0.…”

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confidence: 99%

High-Skill Migration, Multinational Companies, and the Location of Economic Activity

Morales¹

2019

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This paper examines the relationship between high-skill immigration and multinational activity. I assemble a novel firm-level dataset on high-skill visa applications and show that there is a large home-bias effect. Foreign multinational enterprises (MNEs) in the US tend to hire more migrant workers from their home countries compared to US firms. To quantify the general equilibrium implications for production and welfare, I build and estimate a quantitative model that includes trade, MNE production, and the migration decisions of high-skill workers. I use an instrumental variables approach to show that the relationship between immigration and MNEs proposed by the model holds in the data. The model is then used to run two counterfactual exercises. The first, evaluates the implications of a more restrictive immigration policy in the US. I find that MNEs play a significant role in how immigration affects the location of production and welfare. In the second counterfactual exercise, I increase the barriers to MNE production to calculate the welfare gains generated by MNEs. I show that a model not incorporating migration would overestimate the MNE welfare gains for high-skill workers by 35% and underestimate welfare gains for low-skill workers by 8%.

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Migration and FDI: The role of job skills

Cited by 28 publications

References 42 publications

Foreign Direct Investment in oil-abundant countries: The role of institutions

Foreign Direct Investment in oil-abundant countries: The role of institutions

The Impact of Eu Immigration on Economic Growth Through the Skill Composition Channel

High-Skill Migration, Multinational Companies, and the Location of Economic Activity

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