Refugees and Foreign Direct Investment: Quasi-Experimental Evidence from U.S. Resettlements

46 Pages Posted: 14 Jan 2020

See all articles by Anna Maria Mayda

Anna Maria Mayda

Georgetown University - Department of Economics; IZA Institute of Labor Economics

Christopher Robert Parsons

The University of Western Australia - Department of Economics

Hannah Pham

The University of Western Australia

Pierre-Louis Vezina

King’s College London

Multiple version iconThere are 2 versions of this paper

Date Written: December 2019

Abstract

We exploit the designs of two separate U.S. refugee dispersal policies to provide causal evidence that refugees foster outward FDI to their countries of origin. Drawing upon aggregated individual-level refugee and project-level FDI data, we first leverage the quasi-random distribution of refugees "without U.S. ties" after the enactment of the 1980 Refugee Act, to show that outward FDI to refugees' countries of origin grew more from those U.S. commuting zones that hosted greater numbers of refugees after 1990. Secondly, we exploit the specificities of the Indochina Migration and Refugee Assistance Act, which resulted in a quasi-experimental dispersal of Vietnamese refugees in 1975, to provide causal evidence that Vietnamese refugees fostered FDI to their home region, while national domestic reforms in Vietnam amplified the positive FDI-creating effects of the overseas Vietnamese diaspora. Overall, our results highlight a new mechanism through which refugees foster development to their origin countries.

Keywords: Foreign direct investment, networks, Refugees

JEL Classification: F21, F22, F23

Suggested Citation

Mayda, Anna Maria and Parsons, Christopher Robert and Pham, Hannah and Vezina, Pierre-Louis, Refugees and Foreign Direct Investment: Quasi-Experimental Evidence from U.S. Resettlements (December 2019). CEPR Discussion Paper No. DP14242, Available at SSRN: https://ssrn.com/abstract=3518580

Anna Maria Mayda (Contact Author)

Georgetown University - Department of Economics ( email )

Washington, DC 20057
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Christopher Robert Parsons

The University of Western Australia - Department of Economics ( email )

35 Stirling Highway
Crawley, Western Australia 6009
Australia

Hannah Pham

The University of Western Australia ( email )

35 Stirling Highway
Crawley, Western Australia 6009
Australia

Pierre-Louis Vezina

King’s College London ( email )

Strand
London, England WC2R 2LS
United Kingdom

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