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Skilled Migration and Business Networks

  • Frederic, DOCQUIER

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics)

  • Elisabetta, LODIGINI

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics)

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 distinquish 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 Université catholique de Louvain, Département des Sciences Economiques in its series Discussion Papers (ECON - Département des Sciences Economiques) with number 2006036.

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Length: 38
Date of creation: 01 Oct 2006
Date of revision:
Handle: RePEc:ctl:louvec:2006036
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