[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/14242.html
   My bibliography  Save this paper

Refugees and Foreign Direct Investment: Quasi-Experimental Evidence from U.S. Resettlements

Author

Listed:
  • Mayda, Anna Maria
  • Parsons, Christopher
  • Pham, Hannah
  • Vezina, Pierre-Louis
Abstract
We exploit the designs of two separate U.S. refugee dispersal policies to provide causal evidence that refugees foster outward FDI to their countries of origin. Drawing upon aggregated individual-level refugee and project-level FDI data, we first leverage the quasi-random distribution of refugees "without U.S. ties" after the enactment of the 1980 Refugee Act, to show that outward FDI to refugees' countries of origin grew more from those U.S. commuting zones that hosted greater numbers of refugees after 1990. Secondly, we exploit the specificities of the Indochina Migration and Refugee Assistance Act, which resulted in a quasi-experimental dispersal of Vietnamese refugees in 1975, to provide causal evidence that Vietnamese refugees fostered FDI to their home region, while national domestic reforms in Vietnam amplified the positive FDI-creating effects of the overseas Vietnamese diaspora. Overall, our results highlight a new mechanism through which refugees foster development to their origin countries.

Suggested Citation

  • Mayda, Anna Maria & Parsons, Christopher & Pham, Hannah & Vezina, Pierre-Louis, 2019. "Refugees and Foreign Direct Investment: Quasi-Experimental Evidence from U.S. Resettlements," CEPR Discussion Papers 14242, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:14242
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP14242
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. James A. Dunlevy, 2006. "The Influence of Corruption and Language on the Protrade Effect of Immigrants: Evidence from the American States," The Review of Economics and Statistics, MIT Press, vol. 88(1), pages 182-186, February.
    2. MacKinnon, James G & Magee, Lonnie, 1990. "Transforming the Dependent Variable in Regression Models," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(2), pages 315-339, May.
    3. Aksu, Ege & Erzan, Refik & Kırdar, Murat Güray, 2022. "The impact of mass migration of Syrians on the Turkish labor market," Labour Economics, Elsevier, vol. 76(C).
    4. Daude, Christian & Fratzscher, Marcel, 2008. "The pecking order of cross-border investment," Journal of International Economics, Elsevier, vol. 74(1), pages 94-119, January.
    5. Frédéric Docquier & Elisabetta Lodigiani, 2010. "Skilled Migration and Business Networks," Open Economies Review, Springer, vol. 21(4), pages 565-588, September.
    6. Christopher Parsons & Pierre‐Louis Vézina, 2018. "Migrant Networks and Trade: The Vietnamese Boat People as a Natural Experiment," Economic Journal, Royal Economic Society, vol. 128(612), pages 210-234, July.
    7. Murard, Elie & Sakalli, Seyhun Orcan, 2018. "Mass Refugee Inflow and Long-Run Prosperity: Lessons from the Greek Population Resettlement," IZA Discussion Papers 11613, Institute of Labor Economics (IZA).
    8. Konrad B. Burchardi & Tarek A. Hassan, 2013. "The Economic Impact of Social Ties: Evidence from German Reunification," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(3), pages 1219-1271.
    9. Greif, Avner, 1989. "Reputation and Coalitions in Medieval Trade: Evidence on the Maghribi Traders," The Journal of Economic History, Cambridge University Press, vol. 49(4), pages 857-882, December.
    10. David H. Autor & David Dorn, 2013. "The Growth of Low-Skill Service Jobs and the Polarization of the US Labor Market," American Economic Review, American Economic Association, vol. 103(5), pages 1553-1597, August.
    11. Ronald B. Davies & Rodolphe Desbordes & Anna Ray, 2018. "Greenfield versus merger and acquisition FDI: Same wine, different bottles?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 51(4), pages 1151-1190, November.
    12. Lucas, Robert E, Jr, 1990. "Why Doesn't Capital Flow from Rich to Poor Countries?," American Economic Review, American Economic Association, vol. 80(2), pages 92-96, May.
    13. Tumen, Semih, 2018. "The Impact of Low-Skill Refugees on Youth Education," IZA Discussion Papers 11869, Institute of Labor Economics (IZA).
    14. Walter Steingress, 2018. "The causal impact of migration on US trade: Evidence from political refugees," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 51(4), pages 1312-1338, November.
    15. Torfinn Harding & Beata S. Javorcik, 2011. "Roll Out the Red Carpet and They Will Come: Investment Promotion and FDI Inflows," Economic Journal, Royal Economic Society, vol. 121(557), pages 1445-1476, December.
    16. Dany Bahar & Hillel Rapoport, 2018. "Migration, Knowledge Diffusion and the Comparative Advantage of Nations," Economic Journal, Royal Economic Society, vol. 128(612), pages 273-305, July.
    17. C. Fritz Foley & William R. Kerr, 2013. "Ethnic Innovation and U.S. Multinational Firm Activity," Management Science, INFORMS, vol. 59(7), pages 1529-1544, July.
    18. Borensztein, E. & De Gregorio, J. & Lee, J-W., 1998. "How does foreign direct investment affect economic growth?1," Journal of International Economics, Elsevier, vol. 45(1), pages 115-135, June.
    19. Dagnelie, Olivier & Mayda, Anna Maria & Maystadt, Jean-François, 2019. "The labor market integration of refugees in the United States: Do entrepreneurs in the network help?," European Economic Review, Elsevier, vol. 111(C), pages 257-272.
    20. repec:hal:spmain:info:hdl:2441/24ib66dtho86rp6keb6eqd20hr is not listed on IDEAS
    21. Treb Allen, 2014. "Information Frictions in Trade," Econometrica, Econometric Society, vol. 82, pages 2041-2083, November.
    22. repec:hal:spmain:info:hdl:2441/4j5snkuat19kma9diah5p0g5eq is not listed on IDEAS
    23. Dany Bahar & Andreas Hauptmann & Cem Özgüzel & Hillel Rapoport, 2019. "Migration and Post-Conflict Reconstruction: The Effect of Returning Refugees on Export Performance in the Former Yugoslavia," Working Papers 2019-12, CEPII research center.
    24. Marc F. Bellemare & Casey J. Wichman, 2020. "Elasticities and the Inverse Hyperbolic Sine Transformation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(1), pages 50-61, February.
    25. Onur Altındağ & Neeraj Kaushal, 2021. "Do refugees impact voting behavior in the host country? Evidence from Syrian refugee inflows to Turkey," Public Choice, Springer, vol. 186(1), pages 149-178, January.
    26. Javorcik, Beata S. & Özden, Çaglar & Spatareanu, Mariana & Neagu, Cristina, 2011. "Migrant networks and foreign direct investment," Journal of Development Economics, Elsevier, vol. 94(2), pages 231-241, March.
    27. Jean-François Maystadt & Philip Verwimp, 2014. "Winners and Losers among a Refugee-Hosting Population," Economic Development and Cultural Change, University of Chicago Press, vol. 62(4), pages 769-809.
    28. Altındağ, Onur & Bakış, Ozan & Rozo, Sandra V., 2020. "Blessing or burden? Impacts of refugees on businesses and the informal economy," Journal of Development Economics, Elsevier, vol. 146(C).
    29. Buch, Claudia M. & Kleinert, Jörn & Toubal, Farid, 2003. "Where Enterprises Lead, People Follow? Links between Migration and German FDI," Kiel Working Papers 1190, Kiel Institute for the World Economy (IfW Kiel).
    30. George J. Borjas, 2021. "Self-Selection and the Earnings of Immigrants," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 4, pages 69-91, World Scientific Publishing Co. Pte. Ltd..
    31. Kugler, Maurice & Rapoport, Hillel, 2007. "International labor and capital flows: Complements or substitutes?," Economics Letters, Elsevier, vol. 94(2), pages 155-162, February.
    32. Semih Tumen, 2016. "The Economic Impact of Syrian Refugees on Host Countries: Quasi-experimental Evidence from Turkey," American Economic Review, American Economic Association, vol. 106(5), pages 456-460, May.
    33. Albuquerque, Rui, 2003. "The composition of international capital flows: risk sharing through foreign direct investment," Journal of International Economics, Elsevier, vol. 61(2), pages 353-383, December.
    34. Kalena E. Cortes, 2004. "Are Refugees Different from Economic Immigrants? Some Empirical Evidence on the Heterogeneity of Immigrant Groups in the United States," The Review of Economics and Statistics, MIT Press, vol. 86(2), pages 465-480, May.
    35. Gould, David M, 1994. "Immigrant Links to the Home Country: Empirical Implications for U.S. Bilateral Trade Flows," The Review of Economics and Statistics, MIT Press, vol. 76(2), pages 302-316, May.
    36. David Figlio & Umut Özek, 2019. "Unwelcome Guests? The Effects of Refugees on the Educational Outcomes of Incumbent Students," Journal of Labor Economics, University of Chicago Press, vol. 37(4), pages 1061-1096.
    37. Lori A. Beaman, 2012. "Social Networks and the Dynamics of Labour Market Outcomes: Evidence from Refugees Resettled in the U.S," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(1), pages 128-161.
    38. Woodruff, Christopher & Zenteno, Rene, 2007. "Migration networks and microenterprises in Mexico," Journal of Development Economics, Elsevier, vol. 82(2), pages 509-528, March.
    39. Gehrsitz, Markus & Ungerer, Martin, 2017. "Jobs, Crime, and Votes: A Short-run Evaluation of the Refugee Crisis in Germany," IZA Discussion Papers 10494, Institute of Labor Economics (IZA).
    40. Christopher R. Parsons & L. Alan Winters, 2014. "International migration, trade and aid: a survey," Chapters, in: Robert E.B. Lucas (ed.), International Handbook on Migration and Economic Development, chapter 4, pages 65-112, Edward Elgar Publishing.
    41. Buch, Claudia M. & Kleinert, Jorn & Toubal, Farid, 2006. "Where enterprises lead, people follow? Links between migration and FDI in Germany," European Economic Review, Elsevier, vol. 50(8), pages 2017-2036, November.
    42. Greif, Avner, 1993. "Contract Enforceability and Economic Institutions in Early Trade: the Maghribi Traders' Coalition," American Economic Review, American Economic Association, vol. 83(3), pages 525-548, June.
    43. Alan Gamlen, 2014. "Diaspora Institutions and Diaspora Governance," International Migration Review, Wiley Blackwell, vol. 48, pages 180-217, September.
    44. Tolbert, Charles M., II & Killian, Molly Sizer, 1987. "Labor Market Areas for the United States," Staff Reports 277959, United States Department of Agriculture, Economic Research Service.
    45. Del Carpio,Ximena Vanessa & Wagner,Mathis Christoph, 2015. "The impact of Syrian refugees on the Turkish labor market," Policy Research Working Paper Series 7402, The World Bank.
    46. Lauren Cohen & Umit G. Gurun & Christopher Malloy, 2017. "Resident Networks and Corporate Connections: Evidence from World War II Internment Camps," Journal of Finance, American Finance Association, vol. 72(1), pages 207-248, February.
    47. A. D. Roy, 1951. "Some Thoughts On The Distribution Of Earnings," Oxford Economic Papers, Oxford University Press, vol. 3(2), pages 135-146.
    48. Greif, Avner & Milgrom, Paul & Weingast, Barry R, 1994. "Coordination, Commitment, and Enforcement: The Case of the Merchant Guild," Journal of Political Economy, University of Chicago Press, vol. 102(4), pages 745-776, August.
    49. Vandor, Peter & Franke, Nikolaus, 2016. "See Paris and… found a business? The impact of cross-cultural experience on opportunity recognition capabilities," Journal of Business Venturing, Elsevier, vol. 31(4), pages 388-407.
    50. Xu, Bin, 2000. "Multinational enterprises, technology diffusion, and host country productivity growth," Journal of Development Economics, Elsevier, vol. 62(2), pages 477-493, August.
    51. Mark G. Herander & Luz A. Saavedra, 2005. "Exports and the Structure of Immigrant-Based Networks: The Role of Geographic Proximity," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 323-335, May.
    52. Parsons, Christopher & Reysenbach, Tyler & Wahba, Jackline, 2020. "Network Sorting and Labor Market Outcomes: Evidence from the Chaotic Dispersal of the Viet Kieu," IZA Discussion Papers 13952, Institute of Labor Economics (IZA).
    53. Amuedo-Dorantes, Catalina & Bansak, Cynthia & Pozo, Susan, 2018. "Refugee Admissions and Public Safety: Are Refugee Settlement Areas More Prone to Crime?," IZA Discussion Papers 11612, Institute of Labor Economics (IZA).
    54. James E. Rauch, 1996. "Trade and Search: Social Capital, Sogo Shosha, and Spillovers," NBER Working Papers 5618, National Bureau of Economic Research, Inc.
    55. Cortes, Kalena E., 2004. "Are Refugees Different from Economic Immigrants? Some Empirical Evidence on the Heterogeneity of Immigrant Groups in the United States," IZA Discussion Papers 1063, Institute of Labor Economics (IZA).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Joop Age Harm Adema & Cevat Giray Aksoy & Yvonne Giesing & Panu Poutvaara, 2023. "The Effect of Conflict on Ukrainian Refugees’ Return and Integration," CESifo Working Paper Series 10877, CESifo.
    2. Peter Bednarek & Daniel Marcel te Kaat & Chang Ma & Alessandro Rebucci, 2021. "Capital Flows, Real Estate, and Local Cycles:Evidence from German Cities, Banks, and Firms," The Review of Financial Studies, Society for Financial Studies, vol. 34(10), pages 5077-5134.
    3. Jordi Paniagua & Jesús Peiró-Palomino & Andrés J. Picazo-Tadeo, 2021. "Asylum Migration in OECD Countries: In Search of Lost Well-Being," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 153(3), pages 1109-1137, February.
    4. Dreher, Axel & Langlotz, Sarah & Matzat, Johannes & Parsons, Christopher, 2020. "Immigration, Political Ideologies and the Polarization of American Politics," CEPR Discussion Papers 15587, C.E.P.R. Discussion Papers.
    5. Adema, Joop & Aksoy, Cevat Giray & Giesing, Yvonne & Poutvaara, Panu, 2024. "The Effect of Conflict on Refugees' Return and Integration: Evidence from Ukraine," IZA Discussion Papers 16962, Institute of Labor Economics (IZA).
    6. Michael A. Clemens, 2022. "Migration on the Rise, a Paradigm in Decline: The Last Half-Century of Global Mobility," AEA Papers and Proceedings, American Economic Association, vol. 112, pages 257-261, May.
    7. Tan, Man & Yang, Dengyu & Yang, Qijing, 2023. "Institutional quality, asset specificity, and foreign direct investment," Journal of International Money and Finance, Elsevier, vol. 134(C).
    8. Palsson, Craig, 2023. "The forces of path dependence: Haiti's refugee camps, 1937–2009," Explorations in Economic History, Elsevier, vol. 89(C).
    9. Choi, Jaerim & Hyun, Jay & Park, Ziho, 2024. "Bound by ancestors: Immigration, credit frictions, and global supply chain formation," Journal of International Economics, Elsevier, vol. 147(C).
    10. Mensah,Justice Tei & Traore,Nouhoum-000531164, 2022. "Infrastructure Quality and FDI Inflows : Evidence from the Arrival of High-Speed Internet in Africa," Policy Research Working Paper Series 9946, The World Bank.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jackie M. L. Chan & Huanhuan Zheng, 2022. "FDI on the move: cross-border M&A and migrant networks," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 158(3), pages 947-985, August.
    2. Becker, Sascha O. & Ferrara, Andreas, 2019. "Consequences of forced migration: A survey of recent findings," Labour Economics, Elsevier, vol. 59(C), pages 1-16.
    3. Murat, Marina, 2014. "Out of Sight, Not Out of Mind. Education Networks and International Trade," World Development, Elsevier, vol. 58(C), pages 53-66.
    4. Verme, Paolo & Schuettler, Kirsten, 2021. "The impact of forced displacement on host communities: A review of the empirical literature in economics," Journal of Development Economics, Elsevier, vol. 150(C).
    5. Felbermayr, Gabriel & Grossmann, Volker & Kohler, Wilhelm, 2012. "Migration, International Trade and Capital Formation: Cause or Effect?," IZA Discussion Papers 6975, Institute of Labor Economics (IZA).
    6. Hatzigeorgiou, Andreas & Lodefalk, Magnus, 2017. "Anti-Migration as a Threat to Internationalization?," Ratio Working Papers 302, The Ratio Institute.
    7. Marina Murat, 2014. "Soft, hard or smart power? International students and investments abroad," Center for Economic Research (RECent) 107, University of Modena and Reggio E., Dept. of Economics "Marco Biagi".
    8. Akgündüz, Yusuf Emre & Bağır, Yusuf Kenan & Cılasun, Seyit Mümin & Kırdar, Murat Güray, 2023. "Consequences of a massive refugee influx on firm performance and market structure," Journal of Development Economics, Elsevier, vol. 162(C).
    9. Christopher R. Parsons & L. Alan Winters, 2014. "International migration, trade and aid: a survey," Chapters, in: Robert E.B. Lucas (ed.), International Handbook on Migration and Economic Development, chapter 4, pages 65-112, Edward Elgar Publishing.
    10. Andreas Hatzigeorgiou & Patrik Karpaty & Richard Kneller & Magnus Lodefalk, 2024. "Immigrant employment and the contract enforcement costs of offshoring," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 160(3), pages 953-981, August.
    11. Cuadros, Ana & Martín-Montaner, Joan & Paniagua, Jordi, 2016. "Homeward bound FDI: Are migrants a bridge over troubled finance?," Economic Modelling, Elsevier, vol. 58(C), pages 454-465.
    12. Marina Murat, 2014. "Soft, hard or smart power? International students and investments abroad," Department of Economics 0043, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
    13. Marina Murat & Sara Flisi, 2007. "Migrant Business Networks and FDI," Center for Economic Research (RECent) 002, University of Modena and Reggio E., Dept. of Economics "Marco Biagi".
    14. Elisabetta Lodigiani & Luca Marchiori & I-Ling Shen, 2016. "Revisiting the Brain Drain Literature with Insights from a Dynamic General Equilibrium World Model," The World Economy, Wiley Blackwell, vol. 39(4), pages 557-573, April.
    15. Dany Bahar & Andreas Hauptmann & Cem Özgüzel & Hillel Rapoport, 2019. "Migration and Post-Conflict Reconstruction: The Effect of Returning Refugees on Export Performance in the Former Yugoslavia," Working Papers 2019-12, CEPII research center.
    16. Ejaz Ghani & William R. Kerr & Christopher Stanton, 2014. "Diasporas and Outsourcing: Evidence from oDesk and India," Management Science, INFORMS, vol. 60(7), pages 1677-1697, July.
    17. Sari Pekkala Kerr & William R. Kerr, 2018. "Global Collaborative Patents," Economic Journal, Royal Economic Society, vol. 128(612), pages 235-272, July.
    18. Hatzigeorgiou, Andreas & Lodefalk, Magnus, 2018. "Do Migrants Facilitate Internationalization? A Review of the Literature," Working Papers 2018:11, Örebro University, School of Business, revised 19 Dec 2019.
    19. repec:zbw:bofrdp:2017_003 is not listed on IDEAS
    20. Christopher Parsons & Pierre‐Louis Vézina, 2018. "Migrant Networks and Trade: The Vietnamese Boat People as a Natural Experiment," Economic Journal, Royal Economic Society, vol. 128(612), pages 210-234, July.
    21. Albarosa, Emanuele & Elsner, Benjamin, 2023. "Forced Migration and Social Cohesion: Evidence from the 2015/16 Mass Inflow in Germany," IZA Discussion Papers 15850, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    Refugees; Networks; Foreign direct investment;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:14242. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.