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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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    1. Filipe Campante & David Yanagizawa-Drott, 2018. "Long-Range Growth: Economic Development in the Global Network of Air Links," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 133(3), pages 1395-1458.
    2. Walter Steingress, 2018. "The causal impact of migration on US trade: Evidence from political refugees," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 51(4), pages 1312-1338, November.
    3. Egger, Peter H. & Erhardt, Katharina & Lassmann, Andrea, 2019. "Immigration and firms’ integration in international production networks," European Economic Review, Elsevier, vol. 111(C), pages 1-34.
    4. Sandra Sequeira & Nathan Nunn & Nancy Qian, 2020. "Immigrants and the Making of America," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 87(1), pages 382-419.
    5. Bailey, Michael & Gupta, Abhinav & Hillenbrand, Sebastian & Kuchler, Theresa & Richmond, Robert & Stroebel, Johannes, 2021. "International trade and social connectedness," Journal of International Economics, Elsevier, vol. 129(C).
    6. Ager, Philipp & Abramitzky, Ran & Boustan, Leah & Cohen, Elior David & Hansen, Casper Worm, 2019. "The Effects of Immigration on the Economy: Lessons from the 1920s Border Closure," CEPR Discussion Papers 14165, C.E.P.R. Discussion Papers.
    7. Sandra Sequeira & Nathan Nunn & Nancy Qian, 2017. "Migrants and the Making of America: The Shortand Long-Run Effects of Immigration During the Age of Mass Migration," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 15(03), pages 30-34, October.
    8. Mounir Karadja & Erik Prawitz, 2019. "Exit, Voice, and Political Change: Evidence from Swedish Mass Migration to the United States," Journal of Political Economy, University of Chicago Press, vol. 127(4), pages 1864-1925.
    9. Joel Oudinet, 2021. "L’impact de la migration sur le développement inclusif," Post-Print hal-04065384, HAL.
    10. Joel OUDINET, 2021. "Introduction - L’impact de la migration sur le développement inclusif," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 53, pages 5-21.
    11. Ager, Philipp & Hansen, Casper Worm, 2017. "Closing Heaven's Door: Evidence from the 1920s U.S. Immigration Quota Acts," Discussion Papers on Economics 11/2017, University of Southern Denmark, Department of Economics.
    12. Philipp Ager & Casper Worm Hansen, 2016. "National Immigration Quotas and Local Economic Growth," Discussion Papers 16-11, University of Copenhagen. Department of Economics.
    13. Eriksson, Katherine & Ward, Zachary, 2022. "Immigrants and cities during the age of mass migration," Regional Science and Urban Economics, Elsevier, vol. 94(C).
    14. Philipp Ager & James J. Feigenbaum & Casper Worm Hansen & Hui Ren Tan, 2020. "How the Other Half Died: Immigration and Mortality in US Cities," NBER Working Papers 27480, National Bureau of Economic Research, Inc.
    15. Sergio Petralia, 2020. "GPTs and Growth: Evidence on the Technological Adoption of Electrical & Electronic Technologies in the 1920s," Papers in Evolutionary Economic Geography (PEEG) 2033, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Aug 2020.
    16. Cuadros, Ana & Martín-Montaner, Joan & Paniagua, Jordi, 2019. "Migration and FDI: The role of job skills," International Review of Economics & Finance, Elsevier, vol. 59(C), pages 318-332.
    17. Sajid Anwar & Sizhong Sun, 2023. "Foreign direct investment and product quality in host economies," The World Economy, Wiley Blackwell, vol. 46(5), pages 1290-1318, May.
    18. Timothy J Hatton & Zachary Ward, 2018. "International Migration in the Atlantic Economy 1850 - 1940," CEH Discussion Papers 02, Centre for Economic History, Research School of Economics, Australian National University.

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    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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