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Do immigrants attract FDI? District-level evidence from Germany

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  • Li, Chen

Abstract

Using novel German district-level data from 1999-2011, this paper analyses whether the presence of immigrants in a particular location helps to attract inward FDI from the immigrants' country of origin. Results show that a one standard-deviation increase in the immigrant share is associated with a 3.3% rise in firm entry. This effect is stronger for an investor's first entry into Germany, and there is indication that firms from developing countries depend more on immigrants. A quasi-natural experiment exploiting the migration of ethnic Germans from the former Soviet Union in the 1990s (`Sp taussiedler') confirms the results.

Suggested Citation

  • Li, Chen, 2015. "Do immigrants attract FDI? District-level evidence from Germany," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113130, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc15:113130
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    References listed on IDEAS

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    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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