Migration and Foreign Direct Investment: Education Matters
AbstractThe rapid growth in the foreign-born population in many high and middle-income countries in recent decades has prompted much research on the socio-economic determinants and impacts of immigration. This paper investigates the relationship between the stock of foreign population by nationality living in the UK and the bilateral volume of foreign direct investment (FDI), both inward FDI into the UK and outward FDI from the UK. This study contributes to the literature on the above-mentioned association between migration and FDI, by using the UK annual data from 2001 to 2007 for 22 countries on the inward volume of FDI and for 27 countries on the outward volume of FDI. Our study finds a significant and positive relationship between migration and outward FDI. This result also holds, if we correct for endogeneity by using an instrumental variable approach. If we then include the education level of migrants living in the UK, our results indicate that the more educ ated migrants from a certain country are, the stronger positive effect they have on FDI in both directions (inward and outward).
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Bibliographic InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 11-136/3.
Date of creation: 27 Sep 2011
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foreign direct investment; immigration; gravity model; instrumental variable;
Other versions of this item:
- Masood Gheasi & Peter Nijkamp & Piet Rietveld, 2013. "Migration and foreign direct investment: education matters," The Annals of Regional Science, Springer, vol. 51(1), pages 73-87, August.
- F22 - International Economics - - International Factor Movements and International Business - - - International Migration
- P45 - Economic Systems - - Other Economic Systems - - - International Linkages
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-10-09 (All new papers)
- NEP-EDU-2011-10-09 (Education)
- NEP-INT-2011-10-09 (International Trade)
- NEP-MIG-2011-10-09 (Economics of Human Migration)
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