Migration and FDI: Reconciling the standard trade theory with empirical evidence

Arbeitspapier

This article focuses on an apparent conflict between the standard trade theory and available empirical evidence on factor flows. Theoretically, labor and capital flows must be substitutes. However, empirical papers find migration and FDI to be either substitutes or complements, depending upon the skill content of migration. To reconcile the standard theory with these empirical results, we develop a two-country general equilibrium model. We consider three factors - capital, unskilled and skilled labor - and two internationally traded goods. Countries only differ in their factor endowments. The first country is a developing country amply endowed with unskilled labor; the second one is a developed country well endowed with skilled labor. Under imperfect factor mobility, we find that capital and unskilled labor flows are substitutes, while capital and skilled labor flows are complements.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Kiel Working Paper ; No. 2039

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Neoclassical Models of Trade ; International Investment; Long-term Capital Movements ; International Migration ; Geographic Labor Mobility; Immigrant Workers
• Thema: Capital flows ; Migration ; Skills ; Standard trade theory

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Jayet, Hubert ; Marchal, Léa
• Ereignis: Veröffentlichung
• (wer): Kiel Institute for the World Economy (IfW)
• (wo): Kiel
• (wann): 2016

Weitere Informationen

• Handle: http://hdl.handle.net/10419/140903
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ