Skilled Migration and Business Networks

Docquier, Frédéric; Lodigiani, Elisabetta

doi:10.2139/ssrn.1002649

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Skilled Migration and Business Networks

Centro Studi Luca d'Agliano Development Studies Working Paper No. 234

39 Pages Posted: 25 Jul 2007

See all articles by Frédéric Docquier

Frédéric Docquier

Luxembourg Institute of Socio-Economic Research (LISER); Université catholique de Louvain; Luxembourg Institute of Socio-Economic Research (LISER); CREAM, Centre for Research on Environmental Appraisal & Management, UK; IZA Institute of Labor Economics

Elisabetta Lodigiani

University of Milan; Ca Foscari University of Venice; Centro Studi Luca d'Agliano (LdA)

Date Written: May 2007

Abstract

The role of migrants' networks in promoting cross border investments has been stressed in the literature, possibly making migration and FDI complements rather than substitutes in the long run. In this paper, we estimate the magnitude of such business network externalities in dynamic empirical models of FDI-funded capital accumulation. We use original data on capital and migration stocks rather than flows. Regarding migrants, we distinguish the total and the skilled diasporas abroad. In both cross-sectional and panel frameworks, we find evidence of strong network externalities, mainly associated to the skilled diaspora. These network externalities are stronger for countries exhibiting intermediate corruption index.

Keywords: FDI, Migration, Brain drain, Network, Diaspora

JEL Classification: F2, O15, Z13

Suggested Citation: Suggested Citation

Docquier, Frédéric and Docquier, Frédéric and Lodigiani, Elisabetta and Lodigiani, Elisabetta, Skilled Migration and Business Networks (May 2007). Centro Studi Luca d'Agliano Development Studies Working Paper No. 234, Available at SSRN: https://ssrn.com/abstract=1002649 or http://dx.doi.org/10.2139/ssrn.1002649