Migration and Cross-Border Financial Flows

34 Pages Posted: 26 Apr 2017

See all articles by Maurice Kugler

Maurice Kugler

IMPAQ International LLC

Oren Levintal

Interdisciplinary Center (IDC) Herzliyah

Hillel Rapoport

Paris School of Economics (PSE)

Date Written: April 25, 2017

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 and Levintal, Oren and Rapoport, Hillel, Migration and Cross-Border Financial Flows (April 25, 2017). World Bank Policy Research Working Paper No. 8034. Available at SSRN: https://ssrn.com/abstract=2958536

Maurice Kugler (Contact Author)

IMPAQ International LLC ( email )

1325 G Street, NW
Suite 900
Washington, DC 20005
United States

Oren Levintal

Interdisciplinary Center (IDC) Herzliyah ( email )

P.O. Box 167
Herzliya, 46150
Israel

Hillel Rapoport

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

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