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Migration and cross-border financial flows

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  • Kugler,Maurice David
  • Levintal,Oren
  • Rapoport,Hillel

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

  • Kugler,Maurice David & Levintal,Oren & Rapoport,Hillel, 2017. "Migration and cross-border financial flows," Policy Research Working Paper Series 8034, The World Bank.
  • Handle: RePEc:wbk:wbrwps:8034
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Diego USECHE & Ernest MIGUELEZ & Francesco LISSONI, 2019. "Highly skilled and well connected: Migrant inventors in Cross-Border M&As," Cahiers du GREThA 2019-03, Groupe de Recherche en Economie Théorique et Appliquée(GREThA).
    2. Hillel Rapoport, 2016. "Migration and globalization: what’s in it for developing countries?," International Journal of Manpower, Emerald Group Publishing, vol. 37(7), pages 1209-1226, October.
    3. Hillel Rapoport, 2018. "Diaspora externalities: A view from the South," WIDER Working Paper Series 025, World Institute for Development Economic Research (UNU-WIDER).
    4. 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.
    5. 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).
    6. Volker Grossmann, 2016. "How immigration affects investment and productivity in host and home countries," IZA World of Labor, Institute of Labor Economics (IZA), pages 292-292, September.
    7. Éric Rougier & Nicolas Yol, 2019. "The volatility effect of diaspora's location," The World Economy, Wiley Blackwell, vol. 42(6), pages 1796-1827, June.
    8. Ademmer, Esther & Barsbai, Toman & Lücke, Matthias & Stöhr, Tobias, 2015. "30 Years of Schengen: Internal blessing, external curse?," Kiel Policy Brief 88, Kiel Institute for the World Economy (IfW).
    9. repec:oup:wbecrv:v:32:y:2018:i:1:p:41-63. is not listed on IDEAS
    10. 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.
    11. repec:gam:jecomi:v:5:y:2017:i:3:p:31-:d:109008 is not listed on IDEAS
    12. 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).
    13. Ernest Miguélez, 2018. "Inventor Diasporas and the Internationalization of Technology," World Bank Economic Review, World Bank Group, vol. 32(1), pages 41-63.

    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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