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The Migration and FDI Puzzle: Complements or Substitutes?

Author

Listed:
  • Elena D'Agosto

    (Economics Department - University of Rome "Tor Vergata")

  • Nazaria Solferino

    (Economics Department - University of Milan "Bicocca")

  • Giovanni Tria

    (Economics Department - University of Rome "Tor Vergata")

Abstract

This paper analyses the link between FDI inflows and migration waves from developing countries. In addition, it investigates mechanisms through which this link works. Empirical results indicate that FDI can be seen as substitutes of migration through direct and indirect labour demand. However, the paper demonstrates that a positive relationship (complementarity effect) between FDI and migration flows takes place. In longi-tudinal analysis results indicate that the complementarity effect prevails. In cross section analysis, estimating a two equation models, we find that a substitutability effect is at work through the impact of FDI on human capital accumulation but the direct complementarity effect also prevails.

Suggested Citation

  • Elena D'Agosto & Nazaria Solferino & Giovanni Tria, 2006. "The Migration and FDI Puzzle: Complements or Substitutes?," CEIS Research Paper 76, Tor Vergata University, CEIS.
    • Handle: RePEc:rtv:ceisrp:76
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    File URL: https://ceistorvergata.it/RePEc/rpaper/No-76.pdf
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    Cited by:

    1. Mihi-Ramirez, Antonio & Sobierajc, Janusz & Garcia-Rodriguez, Yolanda, 2019. "Interaction of emigration and immigration with foreign direct investment, international trade and remittances," Economics Discussion Papers 2019-63, Kiel Institute for the World Economy (IfW Kiel).
    2. Rezart Hoxhaj & Léa Marchal & Adnan Seric, 2015. "FDI and Migration of Skilled Workers Towards Developing Countries: Firm-Level Evidence from Sub-Saharan Africa," Post-Print hal-01533556, HAL.
    3. Strike Mbulawa, 2017. "Remittances, Foreign Direct Investment and Growth in SADC: A Panel Co-integration Approach," Journal of Finance and Economics Research, Geist Science, Iqra University, Faculty of Business Administration, vol. 2(1), pages 40-55, March.
    4. Inna Lola, 2020. "A Multidimensional Classification for the Information Technology Market," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 4, pages 70-88.
    5. Lastauskas, Povilas & Bičiūnaitė, Audrė, 2012. "Strategies for Deeper Integration: Case Study of the Baltics," MPRA Paper 43321, University Library of Munich, Germany.
    6. Munazah NAZEER* & Uzma TABASSUM** & Shaista ALAM***, 2017. "Banking And Telecommunication Influencing Migration In Major Cities Of Pakistan," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 27(1), pages 101-120.

    More about this item

    Keywords

    International Migration; Human Capital; FDI;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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