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Skilled Migration and Business Networks

  • Frédéric Docquier

    (National Fund for Scientific Research and IRES, Université Catholique de Louvain)

  • Elisabetta Lodigiani

    (University of Milan and LdA)

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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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
Handle: RePEc:csl:devewp:234
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