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Follow the people and the money: Effects of inward FDI on migrant remittances and the contingent role of new firm creation and institutional infrastructure in emerging economies

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  • Piteli, Eleni E.N.
  • Kafouros, Mario
  • Pitelis, Christos N.

Abstract

We explore how inward Foreign Direct Investment (FDI) influences migrant remittances in forty-six emerging economies. We develop and test new theory that not only explains the mechanisms underlying the above relationship, but also helps us understand how entrepreneurial migrants and investments made by multinational enterprises serve as foundations and determinants of remittances in recipient countries. The empirical evidence supports our hypotheses that inward FDI increases remittances, and that the relationship is positively mediated by new firm creation and negatively moderated by institutional infrastructure in recipient countries (namely, governance and corruption). Policy implications and avenues for new research are discussed.

Suggested Citation

  • Piteli, Eleni E.N. & Kafouros, Mario & Pitelis, Christos N., 2021. "Follow the people and the money: Effects of inward FDI on migrant remittances and the contingent role of new firm creation and institutional infrastructure in emerging economies," Journal of World Business, Elsevier, vol. 56(2).
    • Handle: RePEc:eee:worbus:v:56:y:2021:i:2:s1090951620301061
    DOI: 10.1016/j.jwb.2020.101178
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    Cited by:

    1. Florenca Gjorduni, 2023. "Diaspora Impact on Foreign Direct Investment: State Institutions on Diaspora Engagement," European Journal of Marketing and Economics Articles, Revistia Research and Publishing, vol. 6, January -.
    2. Faheem Ur Rehman & József Popp & Ejaz Ahmad & Muhammad Asif Khan & Zoltán Lakner, 2021. "Asymmetric and Symmetric Link between Quality of Institutions and Sectorial Foreign Direct Investment Inflow in India: A Fresh Insight Using Simulated Dynamic ARDL Approach," Sustainability, MDPI, vol. 13(24), pages 1-18, December.
    3. Tang, Ryan W., 2023. "Institutional unpredictability and foreign exit−reentry dynamics: The moderating role of foreign ownership," Journal of World Business, Elsevier, vol. 58(2).

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