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Migration and FDI: The role of job skills

Ana Cuadros (), Joan Martín-Montaner () and Jordi Paniagua ()
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Joan Martín-Montaner: IIE and Economics Department, Universitat Jaume I, Castellón, Spain

No 2017/15, Working Papers from Economics Department, Universitat Jaume I, Castellón (Spain)

Abstract: This paper models and quantifies the role played by migrants occupying a variety of jobs positions (managers, professional and non-qualified) in Foreign Direct Investment (FDI). Higher shares of migrants with management skills are expected to mitigate management and transaction costs of foreign affiliates. We test our model on a global panel data set of Greenfield bilateral investment with wide variety of gravity specifications, both at the extensive and intensive margins. The paper provides a novel rationale for the heterogeneous effects of low-skilled migration and new insights into the mechanisms by which migration operates in the firm’s FDI decisions, with particular attention to the relevance of firm size and activity.

Keywords: migration; foreign Direct Investment; FDI; job skills; gravity equation; extensive margin (search for similar items in EconPapers)
JEL-codes: F21 F22 F23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-int, nep-lab and nep-mig
Date: 2017
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Journal Article: Migration and FDI: The role of job skills (2019) Downloads
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