 Where Enterprises Lead, People Follow? Links Between Migration and German FDIClaudia Buch, Joern Kleinert () and Farid Toubal Post-Print from HAL Abstract: Standard neoclassical models of economic integration are based on the assumptions that capital and labor are substitutes and that the geography of factor market integration does not matter. Yet, these two assumptions are violated if agglomeration forces among factors from specific source countries are at work. Agglomeration implies that factors behave as complements and that the country of origin matters. This paper analyzes agglomeration between capital and labor empirically. We use state-level German data to answer the question whether and how migration and foreign direct investment (FDI) are linked. Stocks of inward FDI and of immigrants have similar determinants, and the geography of factor market integration matters. There are higher stocks of inward FDI in German states hosting a large foreign population from the same country of origin. This agglomeration effect is confined to higher-income source countries. Keywords: Migration; Foreign direct investment; Agglomeration (search for similar items in EconPapers) Published in European Economic Review, 2006, 50 (8), pp.2017-2036. ⟨10.1016/j.euroecorev.2005.11.002⟩ There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00311575 DOI: 10.1016/j.euroecorev.2005.11.002 Access Statistics for this paper More papers in Post-Print from HAL |
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