Migrant Networks and Foreign Direct Investment

23 Pages Posted: 20 Apr 2016

See all articles by Beata Smarzynska Javorcik

Beata Smarzynska Javorcik

University of Oxford - Department of Economics; World Bank - Development Research Group (DECRG); Centre for Economic Policy Research (CEPR)

Caglar Ozden

World Bank - Research Department

Mariana Spatareanu

Rutgers University Department of Economics and Division of Global Affairs

Cristina Constantinescu

World Bank

Date Written: November 1, 2006

Abstract

While there exists sizeable literature documenting the importance of ethnic networks for international trade, little attention has been devoted to studying the effects of networks on foreign direct investment (FDI). The existence of ethnic networks may positively affect FDI by promoting information flows across international borders and by serving as a contract enforcement mechanism. This paper investigates the link between the presence of migrants in the United States and U.S. FDI in the migrants' countries of origin, taking into account the potential endogeneity concerns. The results suggest that U.S. FDI abroad is positively correlated with the presence of migrants from the host country. The data further indicate that the relationship between FDI and migration is driven by the presence of migrants with a college education.

Keywords: Population Policies, Economic Theory & Research, Voluntary and Involuntary Resettlement, Anthropology, Human Migrations & Resettlements

Suggested Citation

Javorcik, Beata Smarzynska and Özden, Çaglar and Spatareanu, Mariana and Constantinescu, Cristina, Migrant Networks and Foreign Direct Investment (November 1, 2006). World Bank Policy Research Working Paper No. 4046, Available at SSRN: https://ssrn.com/abstract=940512

Beata Smarzynska Javorcik (Contact Author)

University of Oxford - Department of Economics ( email )

Manor Road Building
Manor Road
Oxford
United Kingdom

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
202-458-8485 (Phone)
202-522-1159 (Fax)

HOME PAGE: http://econ.worldbank.org/staff/bjavorcik

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Çaglar Özden

World Bank - Research Department ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

HOME PAGE: http://econ.worldbank.org/staff/cozden

Mariana Spatareanu

Rutgers University Department of Economics and Division of Global Affairs ( email )

360 ML King Jr. Blvd.
Newark, NJ 07102
United States
973 353 5249 (Phone)
973 353 5819 (Fax)

Cristina Constantinescu

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
272
Abstract Views
2,310
rank
126,986
PlumX Metrics