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Migrants, Ancestors, and Investments

Author

Listed:
  • Thomas Chaney

    (Toulouse School of Economics)

  • Tarek Hassan

    (The University of Chicago)

  • Konrad Burchardi

    (Institute for International Economic Stu)

Abstract

We use 130 years of data on historical migrations to the United States to show a causal effect of the ancestry composition of US counties on foreign direct investment (FDI) sent and received by local firms. To isolate the causal effect of ancestry on FDI, we build a simple reduced-form model of migrations: migrations from a foreign country to a US county at a given time depend on (i) a push factor, causing emigration from that foreign country to the entire United States, and (ii) a pull factor, causing immigration from all origins into that US county. The interaction between time-series variation in origin-specific push factors and destination-specific pull factors generates quasi-random variation in the allocation of migrants across US counties. We find that a doubling of the number of residents with ancestry from a given foreign country relative to the mean increases by 4.3 percentage points the probability that at least one local rm invests in that country, and increases by 36% the number of employees at domestic recipients of FDI from that country.

Suggested Citation

  • Thomas Chaney & Tarek Hassan & Konrad Burchardi, 2016. "Migrants, Ancestors, and Investments," 2016 Meeting Papers 1311, Society for Economic Dynamics.
  • Handle: RePEc:red:sed016:1311
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    References listed on IDEAS

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    Cited by:

    1. Filipe Campante & David Yanagizawa-Drott, 2016. "Long-range growth: economic development in the global network of air links," UBSCENTER - Working Papers 016, UBS International Center of Economics in Society - Department of Economics - University of Zurich.
    2. Philipp Ager & Casper Worm Hansen, 2016. "National Immigration Quotas and Local Economic Growth," Discussion Papers 16-11, University of Copenhagen. Department of Economics.
    3. Ana Cuadros & Joan Martín-Montaner & Jordi Paniagua, 2017. "Migration and FDI: The role of job skills," Working Papers 2017/15, Economics Department, Universitat Jaume I, Castellón (Spain).

    More about this item

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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