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Skilled Migration, FDI and Human Capital Investment

Author

Listed:
  • Checchi, Daniele

    (University of Milan)

  • De Simone, Gianfranco

    (Fondazione Giovanni Agnelli)

  • Faini, Riccardo

    (University of Rome Tor Vergata)

Abstract
It is commonly believed that accumulation of human capital (HC) and availability of physical and financial capitals are among the major determinants of economic growth. In a globalised world, where factors of production are increasingly mobile, the process of domestic accumulation of HC might be affected in several ways through migration and capital inflows. Furthermore, endowment of skilled labour and foreign direct investments (FDI) may reinforce each other through possible “complementary effects”. Our paper aims to advance the existing empirical literature on the relationship between international factor mobility and domestic accumulation of HC in developing countries. We provide new evidence on how the presence of foreign firms in the domestic economy and the emigration of skilled workers impact the domestic school enrolment. We also investigate whether existing supply of skilled labour is a significant determinant of inward flows of foreign capital. The interdependence between factor mobility and HC accumulation supports some simple back-of-the-envelop calculations aiming to investigate the presence of a virtuous (vicious) circle between HC accumulation and FDI inflows.

Suggested Citation

  • Checchi, Daniele & De Simone, Gianfranco & Faini, Riccardo, 2007. "Skilled Migration, FDI and Human Capital Investment," IZA Discussion Papers 2795, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp2795
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    References listed on IDEAS

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    Cited by:

    1. Mumtaz Hussain Shah & Yahya Khan, 2016. "Trade Liberalisation and FDI Inflows in Emerging Economies," Business & Economic Review, Institute of Management Sciences, Peshawar, Pakistan, vol. 8(1), pages 35-52, April.
    2. Frederic, DOCQUIER & B. Lindsay, LOWELL & Abdeslam, MARFOUK, 2007. "A gendered assessment of the brain drain," Discussion Papers (ECON - Département des Sciences Economiques) 2007045, Université catholique de Louvain, Département des Sciences Economiques.
    3. Artjoms IVLEVS & Jaime DE MELO, 2015. "FDI, the Brain Drain and Trade: Channels and Evidence," World Scientific Book Chapters, in: Developing Countries in the World Economy, chapter 21, pages 533-551, World Scientific Publishing Co. Pte. Ltd..
    4. Mazhar Mughal & Natalia Vechiu, 2011. "The role of Foreign Direct Investment in higher education in the developing countries (Does FDI promote education?)," Working Papers hal-01885159, HAL.
    5. J. Eduardo Ibarra‐Olivo & Andrés Rodríguez‐Pose, 2022. "FDI and the growing wage gap in Mexican municipalities," Papers in Regional Science, Wiley Blackwell, vol. 101(6), pages 1411-1439, December.
    6. Nil Demet Gungor & Aysit Tansel, 2009. "Brain Drain from Turkey: Return Intentions of Skilled Migrants," ERC Working Papers 0902, ERC - Economic Research Center, Middle East Technical University, revised Oct 2009.
    7. DIACONU MAXIM Laura, 2015. "The Dynamics Of The Fdi Inflows During The Last Three Decades. A Comparative Analysis Between Developing And Developed Countries," Revista Economica, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 67(3), pages 46-62.
    8. David Procházka & Cristina Procházková Ilinitchi, 2011. "The Theoretical Relationships among Foreign Direct Investments, Migration and IFRS Adoption," European Financial and Accounting Journal, Prague University of Economics and Business, vol. 2011(4), pages 85-100.
    9. George Pantelopoulos, 2024. "Human Capital, Gender Equality and Foreign Direct Investment: Evidence from OECD Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(2), pages 5608-5624, June.
    10. Frédéric Docquier & B. Lindsay Lowell & Abdeslam Marfouk, 2009. "A Gendered Assessment of Highly Skilled Emigration," Population and Development Review, The Population Council, Inc., vol. 35(2), pages 297-321, June.
    11. Cuadros, Ana & Martín-Montaner, Joan & Paniagua, Jordi, 2019. "Migration and FDI: The role of job skills," International Review of Economics & Finance, Elsevier, vol. 59(C), pages 318-332.
    12. Dustmann, Christian & Glitz, Albrecht, 2011. "Migration and Education," Handbook of the Economics of Education, in: Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), Handbook of the Economics of Education, edition 1, volume 4, chapter 0, pages 327-439, Elsevier.
    13. Terrell, Katherine & Jurajda, Štěpán, 2007. "Regional Unemployment and Human Capital in Transition Economies," CEPR Discussion Papers 6569, C.E.P.R. Discussion Papers.
    14. Fisayo Fagbemi & Tolulope T. Osinubi, 2020. "Leveraging Foreign Direct Investment for Sustainability: An Approach to Sustainable Human Development in Nigeria," Working Papers 20/090, European Xtramile Centre of African Studies (EXCAS).
    15. Kottaridi, Constantina & Louloudi, Konstantina & Karkalakos, Sotiris, 2019. "Human capital, skills and competencies: Varying effects on inward FDI in the EU context," International Business Review, Elsevier, vol. 28(2), pages 375-390.
    16. Ibarra-Olivo, J. Eduardo, 2021. "Foreign direct investment and youth educational outcomes in Mexican municipalities," Economics of Education Review, Elsevier, vol. 82(C).
    17. Štěpán Jurajda & Katherine Terrell, 2009. "Regional unemployment and human capital in transition economies1," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 17(2), pages 241-274, April.
    18. Asali, Muhammad & Cristobal-Campoamor, Adolfo, 2011. "Optimal foreign direct investment in the presence of human capital formation," MPRA Paper 31460, University Library of Munich, Germany.
    19. Elisabetta Lodigiani, 2009. "Diaspora Externalities as a Cornerstone of the New Brain Drain Literature," DEM Discussion Paper Series 09-03, Department of Economics at the University of Luxembourg.
    20. Mohamed Abdouli & Anis Omri, 2021. "Exploring the Nexus Among FDI Inflows, Environmental Quality, Human Capital, and Economic Growth in the Mediterranean Region," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 12(2), pages 788-810, June.
    21. Giorgia Giovannetti & Filippo Santi & Margherita Velucchi, 2024. "“Migrants know better”: migrants’ networks and FDI," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 41(1), pages 85-121, April.
    22. Filippo Santi & Giorgia Giovannetti & Margherita Velucchi, 2021. "Migrants know better: Migrants' networks and FDI," Working Papers - Economics wp2021_17.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    23. Imran Sarihasan, 2017. "The Gender Differences Of Immigration In Oecd Countries," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 697-706, July.
    24. Mazhar Yasin MUGHAL & Natalia VECHIU, 2010. "The role of Foreign Direct Investment in higher education in the developing countries (Does FDI promote education?)," Working Papers 2010-2011_10, CATT - UPPA - Université de Pau et des Pays de l'Adour, revised Nov 2010.
    25. Acharyya, Rajat & Kar, Saibal, 2017. "On Asymmetric Migration Patterns from Developing Countries," GLO Discussion Paper Series 4, Global Labor Organization (GLO).

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    More about this item

    Keywords

    human capital investment; factor mobility; FDI; brain drain/gain; complementarity effects; developing countries;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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