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FDI, the Brain Drain and Trade: Channels and Evidence

  • Artjoms Ivlevs

    (University of Nottingham)

  • Jaime de Melo

    (University of Geneva, CERDI and CEPR)

This paper explores the links between the patterns of migration (high vs. low-skill), trade policy, and foreign direct investment (FDI) from the standpoint of sending countries. A skeleton general equilibrium model with a non-traded good and sector-specific labour is used to explore the effects of the skill-composition of exports on FDI. The model suggests that if exports are low-skill intensive, emigration of high- skill labour leads to positive FDI, suggesting that migration and FDI are complements. Cross-sectional analysis using FDI and emigration data for 103 migration-sending countries over the period 1990-2000 finds some support for this conjecture.

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File URL: http://www.dagliano.unimi.it/media/wp2008_261.pdf
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Paper provided by Centro Studi Luca d\'Agliano, University of Milano in its series Development Working Papers with number 261.

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Length: 32
Date of creation: 27 Oct 2008
Date of revision:
Handle: RePEc:csl:devewp:261
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