FDI, the Brain Drain and Trade: Channels and Evidence

Jaime A.P. de Melo () and Artjoms Ivlevs

No 7002, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper explores the links between the patterns of migration (high vs. low-skill), trade policy, and foreign direct investment (FDI) from the standpoint of sending countries. A skeleton general equilibrium model with a non-traded good and sector-specific labour is used to explore the effects of the skill-composition of exports on FDI. The model suggests that if exports are low-skill intensive, emigration of high- skill labour leads to positive FDI, suggesting that migration and FDI are complements. Cross-sectional analysis using FDI and emigration data for 103 migration-sending countries over the period 1990-2000 finds some support for this conjecture.

Keywords: Brain Drain; FDI; Migration; Trade (search for similar items in EconPapers)
JEL-codes: F13 F16 F22 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hrm and nep-int
Date: 2008-10
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Related works:
Journal Article: FDI, the Brain Drain and Trade: Channels and Evidence (2010)
Working Paper: FDI, the Brain Drain and Trade: Channels and Evidence (2008)
Working Paper: FDI, the Brain Drain and Trade: Channels and Evidence
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