Where enterprises lead, people follow? Links between migration and FDI in Germany

Buch, Claudia M.; Kleinert, Jörn; Toubal, Farid

doi:10.1016/j.euroecorev.2005.11.002

Cited by 100 publications

(68 citation statements)

References 25 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…As expected, the positive influence of the aggregate cluster variable is smaller than the impact of the country-specific cluster variable. The finding corroborates that firms particularly benefit from national networks, where no language or cultural barrier impedes informational interchanges (Buch, Kleinert, and Toubal, 2006). Interestingly, the coefficient of cluster has decreased as compared to columns (1) and (2).…”

Section: Estimations On the Whole Samplesupporting

confidence: 74%

Network and border effects: Where do foreign multinationals locate in Germany?

Spies

2010

Regional Science and Urban Economics

View full text Add to dashboard Cite

This study assesses the determinants of location choices of foreign multinational firms at the level of German federal states. Adjacency and existing firm networks are assumed to influence the investors' profits in a given location by overcoming informational disadvantages when entering the new market. A conditional and a nested logit model resemble the structure of the location choice process of individual investors well. By using affiliate-level data between 1997 and 2005, the results confirm that firms react positively to local demand, a common border and existing firm networks, while unit labour costs exhibit the expected negative impact. In the sectoral estimations, it is shown that these effects vary in their relevance among manufacturing and service affiliates, and between upstream and downstream activities.

show abstract

Section: Estimations On the Whole Samplesupporting

confidence: 74%

Network and border effects: Where do foreign multinationals locate in Germany?

Spies

2010

Regional Science and Urban Economics

View full text Add to dashboard Cite

show abstract

“…For example, Karemera et al (2000) used this model to test empirically determinants of international immigration and Porojan (2001) and Eaton and Kortum (1999) used this model to measure specific factors (technology, infrastructure and so on) in international trade, while Tong (2005), Javorcik et al (2010) and Buch et al (2006) used the gravity model to study the link between migration and foreign direct investment. Bhattacharya and Groznik (2008) employed the gravity model with cross-section dummy variables in studying the effect of migration on investment.…”

Section: Estimation Approachmentioning

confidence: 99%

“…Next, Federici and Giannetti (2008) have also studied the link between migration and FDI, and they found a strong evidence of network externalities, which is mainly associated with the skilled diaspora. And finally, Buch et al (2006) showed that German FDI outflows and migration inflows are strong complements. In conclusion, some fragmented statistical evidence is present on the relationship between migration and FDI.…”

Section: Introductionmentioning

confidence: 99%

“…In contrast, the relationship between migration and FDI is an under-investigated area. A limited number of studies for example, Aroca and Maloney (2005), Tong (2005), Buch et al (2006), Kugler and Rapoport (2007), Bhattacharya and Groznik (2008), Javorcik et al (2010) and Federici and Giannetti (2010) have addressed this link, and they reported a positive and significant link between migration and FDI. Javorcik et al (2010) have shown that the stock of US FDI abroad is positively correlated with the presence of migrants.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Migration and foreign direct investment: education matters

2012

View full text Add to dashboard Cite

“…New approaches in the literature stress that uncertainty and imperfect information impose barriers to trade and investment from MNEs (see Buch et al, 2006;Aubry et al, 2014). Based on the theory of networks, these approaches suggest that both emigrants and immigrants have positive and significant effects on bilateral trade and FDI flows.…”

Section: Introductionmentioning

confidence: 99%

Homeward bound FDI: Are migrants a bridge over troubled finance?

2016

View full text Add to dashboard Cite

Migrants can lower cross-border investment barriers, help investors by providing information about their homeland and reduce transaction costs by sharing expertise on regulations, customs and procedures. In addition to generating these well-known networking effects, migrants can also provide valuable information about local finance, thereby easing the credit constraints foreign investors faced during the 2007 financial crisis. This paper sheds new light on the underlying mechanisms through which migration may affect foreign investment in the migrant's homeland by distinguishing between the effects on FDI's intensive and extensive margins. Gravity estimates for 140 countries for the period 2003-2012 suggest that migrants exert a positive effect on bilateral FDI. However, financial constraints moderate this effect, primarily through the extensive margin. Additionally, quantile regression reveals that the interaction between migration and credit constraints is significant only for the lower levels of FDI. Our findings contribute to a better understanding of the interplay among migration, financial constraints and FDI.

show abstract

Where enterprises lead, people follow? Links between migration and FDI in Germany

Cited by 100 publications

References 25 publications

Network and border effects: Where do foreign multinationals locate in Germany?

Network and border effects: Where do foreign multinationals locate in Germany?

Migration and foreign direct investment: education matters

Homeward bound FDI: Are migrants a bridge over troubled finance?

Contact Info

Product

Resources

About