Arnoldshain Seminar XV
“The EU and Latin America Facing Globalization”
September 4 – 6, 2017
Vienna


   
Cuadros, Ana, Universitat Jaume I of Castellon, and Joan Martín-Montaner, Jordi Paniagua, Migration and FDI: The Role of Job Heterogeneity.
This paper models and quanti es the role played by migrants' skill heterogeneity in terms of job position in the migration-FDI link. The model helps us understand why migrants working in different positions have an dissimilar effect on lowering bilateral impediments to FDI. The affliate's managers face transfer cost related to information asymmetries (e.g., different languages)between the headquarter and local blue collar workers. Therefore, skilled migration reduces this bilateral costs and the effect of non-quali ed workers should be absorbed by country fixed effects in structural gravity estimates. When we test our model on a global panel dataset of green eld investments, we observe that the effect on FDI is mainly driven by managerial roles and professional positions with a stronger in infuence on the extensive margin. Non- quali ed migrants have a non-signi cant effect on larger investment projects above the 90th percentile and in service activities, where information provided by migrants is likely to be more infuential. Additionally, the paper explores the relative infuence of the information and demand channels. Migrant's positive effect on the demand for foreign products is ampli ed by the share skilled migrants and offset by the share of non-quali ed migrants, which have a insigni ficant effect on bilateral FDI. Keywords: Migration, Migrant job heterogeneity, Occupation, Foreign Direct Investment (FDI), Gravity JEL Classi cation: F22, F23, F16