Luigi Benfratello, Davide Castellani, Anna D'Ambrosio
{"title":"Migration and the location of MNE activities: Evidence from Italian provinces","authors":"Luigi Benfratello, Davide Castellani, Anna D'Ambrosio","doi":"10.1111/jors.12674","DOIUrl":null,"url":null,"abstract":"<p>We investigate the migration-inward foreign direct investment (FDI) nexus in narrow geographies. A novel two-stage empirical strategy allows us to investigate the role of migration as a determinant of multinational enterprises (MNEs) location choices and unpick heterogeneity in foreign investors' preferences towards the presence of migrants in the host location. This allows us to shed light on the relative importance of the underlying mechanisms linking migration and inward FDI. Relying on 1113 greenfield investments by 895 MNEs in Italian NUTS3 regions over 2003–2015, we find that immigrants from the country of origin of the investor exert a positive but highly heterogeneous effect on MNE location choices. Investors are more sensitive to the presence of migrants from their country of origin when they lack experience in the destination country (first-time investors) and when their investments concern market-access or business-services (downstream) activities. This is consistent with the view that migrants act as information brokers that bridge the fixed costs of international business activities.</p>","PeriodicalId":48059,"journal":{"name":"Journal of Regional Science","volume":null,"pages":null},"PeriodicalIF":3.2000,"publicationDate":"2023-12-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/jors.12674","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Regional Science","FirstCategoryId":"96","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1111/jors.12674","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
We investigate the migration-inward foreign direct investment (FDI) nexus in narrow geographies. A novel two-stage empirical strategy allows us to investigate the role of migration as a determinant of multinational enterprises (MNEs) location choices and unpick heterogeneity in foreign investors' preferences towards the presence of migrants in the host location. This allows us to shed light on the relative importance of the underlying mechanisms linking migration and inward FDI. Relying on 1113 greenfield investments by 895 MNEs in Italian NUTS3 regions over 2003–2015, we find that immigrants from the country of origin of the investor exert a positive but highly heterogeneous effect on MNE location choices. Investors are more sensitive to the presence of migrants from their country of origin when they lack experience in the destination country (first-time investors) and when their investments concern market-access or business-services (downstream) activities. This is consistent with the view that migrants act as information brokers that bridge the fixed costs of international business activities.
期刊介绍:
The Journal of Regional Science (JRS) publishes original analytical research at the intersection of economics and quantitative geography. Since 1958, the JRS has published leading contributions to urban and regional thought including rigorous methodological contributions and seminal theoretical pieces. The JRS is one of the most highly cited journals in urban and regional research, planning, geography, and the environment. The JRS publishes work that advances our understanding of the geographic dimensions of urban and regional economies, human settlements, and policies related to cities and regions.