The Migration FDI Puzzle: Complements or Substitutes?

23 Pages Posted: 14 Nov 2006

See all articles by Elena D'Agosto

Elena D'Agosto

University of Rome Tor Vergata - Faculty of Economics

Nazaria Solferino

University of Rome Tor Vergata - Faculty of Economics

Giovanni Tria

University of Rome Tor Vergata - Faculty of Economics

Abstract

This paper analyses the link between FDI inflows and migration waves from developing countries. In addition, it investigates mechanisms through which this link works. Empirical results indicate that FDI can be seen as substitutes of migration through direct and indirect labour demand.

However, the paper demonstrates that a positive relationship (complementarity effect) between FDI and migration flows takes place. In longitudinal analysis results indicate that the complementarity effect prevails.

In cross section analysis, estimating a two equation models, we find that a substitutability effect is at work through the impact of FDI on human capital accumulation but the direct complementarity effect also prevails.

Keywords: International Migration, Human Capital, FDI

JEL Classification: F22, J24, F21

Suggested Citation

D'Agosto, Elena and Solferino, Nazaria and Tria, Giovanni, The Migration FDI Puzzle: Complements or Substitutes?. CEIS Working Paper No. 90, Available at SSRN: https://ssrn.com/abstract=944460 or http://dx.doi.org/10.2139/ssrn.944460

Elena D'Agosto (Contact Author)

University of Rome Tor Vergata - Faculty of Economics ( email )

Via Columbia n.2
Rome, rome 00100
Italy

Nazaria Solferino

University of Rome Tor Vergata - Faculty of Economics ( email )

Via Columbia n.2
Rome, rome 00100
Italy

Giovanni Tria

University of Rome Tor Vergata - Faculty of Economics ( email )

Via Columbia n.2
Rome, rome 00100
Italy

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