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Migration and Cross-Border Financial Flows

Author

Listed:
  • Maurice Kugler

    (BM = WB - La Banque Mondiale = The World Bank - WBG = GBM - World Bank Group = Groupe Banque Mondiale)

  • Oren Levintal

    (Bar-Ilan University [Israël])

  • Hillel Rapoport

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique)

Abstract

Migration facilitates the flow of information between countries, thereby reducing informational frictions that potentially hamper cross-country financial flows. Using a gravity model, migration is found to be highly correlated with financial flows from the migrant's host country to her home country. The correlation is strongest where information problems are more acute (e.g., between culturally more distant countries), for asset types that are more informational sensitive, and for the type of migrants that are most able to enhance the flow of information on their home countries, namely, skilled migrants. These differential effects are interpreted as evidence for the role of migration in reducing information frictions between countries.

Suggested Citation

  • Maurice Kugler & Oren Levintal & Hillel Rapoport, 2018. "Migration and Cross-Border Financial Flows," PSE-Ecole d'économie de Paris (Postprint) halshs-01630659, HAL.
    • Handle: RePEc:hal:pseptp:halshs-01630659
    DOI: 10.1093/wber/lhx007
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    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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    Cited by:

    1. Miguelez, Ernest & Noumedem Temgoua, Claudia, 2020. "Inventor migration and knowledge flows: A two-way communication channel?," Research Policy, Elsevier, vol. 49(9).
    2. Dany Bahar, 2020. "Diasporas and Economic Development: A Review of the Evidence and Policy," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 62(2), pages 200-214, June.
    3. Ernest Miguélez, 2018. "Inventor Diasporas and the Internationalization of Technology," The World Bank Economic Review, World Bank, vol. 32(1), pages 41-63.
    4. Hillel Rapoport, 2016. "Migration and globalization: what’s in it for developing countries?," International Journal of Manpower, Emerald Group Publishing Limited, vol. 37(7), pages 1209-1226, October.
    5. Hillel Rapoport, 2018. "Diaspora externalities: A view from the South," WIDER Working Paper Series 025, World Institute for Development Economic Research (UNU-WIDER).
    6. Anna Minasyan & Peter Nunnenkamp, 2016. "Remittances and the Effectiveness of Foreign Aid," Review of Development Economics, Wiley Blackwell, vol. 20(3), pages 681-701, August.
    7. Etzo, Ivan & Takaoka, Sumiko, 2016. "The impact of migrants on the cross-border M&A: Some evidence for Japan," MPRA Paper 71558, University Library of Munich, Germany.
    8. Lücke, Matthias & Stöhr, Tobias, 2015. "Heterogeneous immigrants and foreign direct investment: The role of language skills," Kiel Working Papers 2009, Kiel Institute for the World Economy (IfW Kiel).
    9. Volker Grossmann, 2021. "How immigration affects investment and productivity in host and home countries," IZA World of Labor, Institute of Labor Economics (IZA), pages 292-292, October.
    10. Bhardwaj, Bhawana & Sharma, Dipanker, 2023. "Migration of skilled professionals across the border: Brain drain or brain gain?," European Management Journal, Elsevier, vol. 41(6), pages 1021-1033.
    11. Masood Gheasi & Peter Nijkamp, 2017. "A Brief Overview of International Migration Motives and Impacts, with Specific Reference to FDI," Economies, MDPI, vol. 5(3), pages 1-11, August.
    12. Liu, Xukang & Ma, Chao-Qun & Ren, Yi-Shuai, 2025. "ESG reactions to fintech: The role of cross-border capital flows," Research in International Business and Finance, Elsevier, vol. 76(C).
    13. Orefice, Gianluca & Rapoport, Hillel & Santoni, Gianluca, 2025. "How Do Immigrants Promote Exports?," Journal of Development Economics, Elsevier, vol. 174(C).
    14. Anthony Edo & Lionel Ragot & Hillel Rapoport & Sulin Sardoschau & Andreas Steinmayr & Arthur Sweetman, 2020. "An introduction to the economics of immigration in OECD countries," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(4), pages 1365-1403, November.
    15. Ding, Haoyuan & Fan, Haichao & Jin, Yuying & Qi, Tong, 2022. "Talented overseas returnees and outward foreign direct investment," European Economic Review, Elsevier, vol. 148(C).
    16. Eric Rougier & Nicolas Yol, 2018. "The volatility effect of diaspora’s location: A migration portfolio approach," Cahiers du GREThA (2007-2019) 2018-09, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    17. Donaubauer, Julian & Glas, Alexander & Nunnenkamp, Peter, 2015. "Infrastructure and trade: A gravity analysis for major trade categories using a new index of infrastructure," Kiel Working Papers 2016, Kiel Institute for the World Economy (IfW Kiel).
    18. Dany Bahar, 0. "Diasporas and Economic Development: A Review of the Evidence and Policy," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 0, pages 1-15.
    19. Matthias Lücke & Tobias Stöhr, 2018. "Heterogeneous immigrants, exports and foreign direct investment: The role of language skills," The World Economy, Wiley Blackwell, vol. 41(6), pages 1529-1548, June.
    20. Hillel Rapoport, 2018. "Diaspora externalities: A view from the South," WIDER Working Paper Series wp-2018-25, World Institute for Development Economic Research (UNU-WIDER).
    21. Ademmer, Esther & Barsbai, Toman & Lücke, Matthias & Stöhr, Tobias, 2015. "30 Years of Schengen: Internal blessing, external curse?," Kiel Policy Briefs 88, Kiel Institute for the World Economy (IfW Kiel).
    22. Diego Useche & Ernest Miguelez & Francesco Lissoni, 2019. "Highly skilled and well connected: Migrant inventors in cross-border M&As," Post-Print halshs-02024499, HAL.
    23. Diego Useche & Ernest Miguelez & Francesco Lissoni, 2020. "Highly skilled and well connected: Migrant inventors in cross-border M&As," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(5), pages 737-763, July.

    More about this item

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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