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Skilled Migration and Business Networks

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Author Info
Frédéric Docquier (National Fund for Scientific Research and IRES, Université Catholique de Louvain)
Elisabetta Lodigiani (University of Milan and LdA)

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Abstract

The role of migrants’ networks in promoting cross border investments has been stressed in the literature, possibly making migration and FDI complements rather than substitutes in the long run. In this paper, we estimate the magnitude of such business network externalities in dynamic empirical models of FDI-funded capital accumulation. We use original data on capital and migration stocks rather than flows. Regarding migrants, we distinguish the total and the skilled diasporas abroad. In both cross-sectional and panel frameworks, we find evidence of strong network externalities, mainly associated to the skilled diaspora. These network externalities are stronger for countries exhibiting intermediate corruption index.

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Publisher Info
Paper provided by Centro Studi Luca d\'Agliano, University of Milano in its series Development Working Papers with number 234.

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Length: 39
Date of creation: 02 May 2007
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Handle: RePEc:csl:devewp:234

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Related research
Keywords: FDI; Migration; Brain drain; Network; Diaspora;

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Find related papers by JEL classification:
F2 - International Economics - - International Factor Movements and International Business
O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
Z13 - Other Special Topics - - Cultural Economics - - - Social Norms and Social Capital; Social Networks Economic Anthropology

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    Other versions:
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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. Daniele Checchi & Gianfranco De Simone & Riccardo Faini, 2007. "Skilled Migration, FDI and Human Capital Investment," Development Working Papers 235, Centro Studi Luca d\'Agliano, University of Milano. [Downloadable!]
    Other versions:
  2. Beine, Michel & Docquier, Frédéric & Schiff, Maurice, 2008. "Brain Drain and its Determinants: A Major Issue for Small States," IZA Discussion Papers 3398, Institute for the Study of Labor (IZA). [Downloadable!]
  3. Frédéric Docquier, 2006. "Brain Drain and Inequality Across Nations," IZA Discussion Papers 2440, Institute for the Study of Labor (IZA). [Downloadable!]
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