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FDI, Infrastructure and the Welfare Effects of Labour Migration

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Author Info
Barry, Frank
Abstract

A model of a small open economy with open capital and labour markets is presented. Labour demand is based on capital mobility and increasing returns in production. Migration decisions are based on the relative attractiveness of regions in terms of the stock of infrastructure, including its tax cost and the degree of congestion, and the level of wages prevailing. Equilibria are not Pareto-efficient because individuals do not take account of the impact of their actions on the level of wages prevailing, the extent of the tax base to finance infrastructural provision, or the degree of congestion. The model generates new insights into a range of policy issues that surfaced over the course of the recent Irish boom.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3380.

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Date of creation: May 2002
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Handle: RePEc:cpr:ceprdp:3380

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Keywords: foreign direct investment;

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Find related papers by JEL classification:
F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
F22 - International Economics - - International Factor Movements and International Business - - - International Migration
H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Haaland, Jan I & Wooton, Ian, 1999. " International Competition for Multinational Investment," Scandinavian Journal of Economics, Blackwell Publishing, vol. 101(4), pages 631-49, December. [Downloadable!] (restricted)
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  2. Markusen, James R. & Venables, Anthony J., 1999. "Foreign direct investment as a catalyst for industrial development," European Economic Review, Elsevier, vol. 43(2), pages 335-356, February. [Downloadable!] (restricted)
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  3. Richard E. Baldwin & Joseph F. Francois & Richard Portes, 1997. "The costs and benefits of eastern enlargement: the impact on the EU and central Europe," Economic Policy, CEPR, CES, MSH, vol. 12(24), pages 125-176, 04. [Downloadable!] (restricted)
  4. Andersson, Fredrik & Forslid, Rikard, 2000. "What We Cannot Learn from the Irish Experience: A fundamental Asymmetry of Asymmetric Shocks," Research Papers in Economics 2000:10, Stockholm University, Department of Economics. [Downloadable!]
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  5. Braconier, Henrik & Ekholm, Karolina, 2001. "Foreign Direct Investment in Central and Eastern Europe: Employment Effects in the EU," CEPR Discussion Papers 3052, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  6. Krugman, P. & Venables, A.J., 1995. "Globalization and the Inequality of Nations," Research Institute of Industrial Economics Working Papers 430, Research Institute of Industrial Economics (IFN).
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  7. James R. Markusen, 1998. "Multinational Firms, Location and Trade," The World Economy, Blackwell Publishing, vol. 21(6), pages 733-756, 08. [Downloadable!] (restricted)
  8. Richard G. Harris, 1995. "Trade and Communication Costs," Canadian Journal of Economics, Canadian Economics Association, vol. 28(s1), pages 46-75, November.
  9. Martin, Philippe & Rogers, Carol Ann, 1995. "Industrial location and public infrastructure," Journal of International Economics, Elsevier, vol. 39(3-4), pages 335-351, November. [Downloadable!] (restricted)
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  10. Spiros Bougheas & Panicos O. Demetriades & Theofanis P. Mamuneas, 2000. "Infrastructure, specialization, and economic growth," Canadian Journal of Economics, Canadian Economics Association, vol. 33(2), pages 506-522, May. [Downloadable!] (restricted)
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  11. Krugman, Paul & Venables, Anthony J., 1990. "Integration and the Competitiveness of Peripheral Industry," CEPR Discussion Papers 363, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Claudia M. Buch & Jörn Kleinert & Farid Toubal, 2003. "Where Enterprises Lead, People Follow? Links between Migration and German FDI," Kiel Working Papers 1190, Kiel Institute for the World Economy. [Downloadable!]
  2. Frank Barry & Michael B. Devereux, 2006. "A Theoretical Growth Model for Ireland," The Economic and Social Review, Economic and Social Studies, vol. 37(2), pages 245-262. [Downloadable!]
  3. Barry, Frank, 2009. "Social Partnership, Competitiveness and Exit from Fiscal Crisis," The Economic and Social Review, Economic and Social Studies, vol. 40(1), pages 1-14. [Downloadable!]
  4. Frank Barry, 2005. "Third-Level Education, Foreign Direct Investment and Economic Boom in Ireland," Working Papers 200509, School Of Economics, University College Dublin. [Downloadable!]
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