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The Migration and FDI Puzzle: Complements or Substitutes?

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Author Info
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")

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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.

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Publisher Info
Paper provided by Tor Vergata University, CEIS in its series CEIS Research Paper with number 76.

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Length: 22
Date of creation: 25 Oct 2006
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Handle: RePEc:rtv:ceisrp:76

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Postal: CEIS - Centre for Economic and International Studies - Faculty of Economics - University of Rome "Tor Vergata" - Via Columbia, 2 00133 Roma
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Related research
Keywords: International Migration; Human Capital; FDI;

Find related papers by 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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This page was last updated on 2009-12-4.

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