Heterogeneous Immigrants and Foreign Direct Investment: The Role of Language Skills

Matthias Lücke () and Tobias Heidland

No 9419, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We investigate the interplay of language skills and immigrant stocks in determining bilateral FDI out-stocks of OECD reporting countries. Applying a Poisson panel estimator to 2004-2011 data, we find a robust positive effect of bilateral immigrants on bilateral FDI – provided that residents of the two countries have few language skills in common. We find a similar effect for immigrants from third countries that speak the language(s) of the FDI host country, making them potential substitutes for bilateral migrants. Our findings suggest that immigrants facilitate outgoing FDI through their language skills, rather than through other characteristics like cultural familiarity.

Keywords: migration; FDI; foreign languages; globalization (search for similar items in EconPapers)
JEL-codes: F21 F22 O14 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2015-10
New Economics Papers: this item is included in nep-int and nep-mig
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Related works:
Working Paper: Heterogeneous immigrants and foreign direct investment: The role of language skills (2015)
Working Paper: Heterogeneous Immigrants and Foreign Direct Investment: The Role of Language Skills (2015)
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