Konrad Burchardi (Institute for International Economic Studies, Stockholm)
| Dates: | 16 March 2017 |
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| Times: | 16:15 - 17:45 |
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| What is it: | Seminar |
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| Organiser: | School of Social Sciences |
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| Speaker: | Konrad B. Burchardi |
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Title: Migrants, Ancestors, and Foreign Investment
Abstract
We use 130 years of data on historical migrations to the United States to show a causal
effect of the ancestry composition of US counties on foreign direct investment (FDI) sent
and received by local firms. To isolate the causal effect of ancestry on FDI, we build a simple
reduced-form model of migrations: Migrations from a foreign country to a US county at
a given time depend on (i) a push factor, causing emigration from that foreign country to
the entire United States, and (ii) a pull factor, causing immigration from all origins into
that US county. The interaction between time-series variation in origin-specific push factors
and destination-specific pull factors generates quasi-random variation in the allocation of
migrants across US counties. We find that a doubling of the number of residents with
ancestry from a given foreign country relative to the mean increases by 4 percentage points
the probability that at least one local firm engages in FDI with that country. We present
evidence this effect is primarily driven by a reduction in information frictions, and not by
better contract enforcement, taste similarities, or a convergence in factor endowments.
Speaker
Konrad B. Burchardi
Role: Assistant Professor of Economics
Organisation: Institute for International Economic Studies, Stockholm
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G32
Humanities Bridgeford Street
Manchester
