Migrants, Ancestors, and Foreign Investments
By Konrad B. Burchardi, Thomas Chaney, Tarek A. Hassan. The Review of Economic Studies, 2018
169 citations recorded by the source corpus.
We use 130 years of data on historical migrations to the U.S. to show a causal effect of the ancestry composition of U.S. 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 U.S. county at a given time depend on (1) a push factor, causing emigration from that foreign country to the entire U.S., and (2) a pull factor, causing immigration from all origins into that U.S. 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 U.S. counties. We find that doubling the number of residents with ancestry from a given foreign country relative to the mean increases the probability that at least one local firm engages in FDI with that country by 4 percentage points. We present evidence that 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.
Subfields: Accounting, Demography, Economics and Econometrics
View Paper: https://www.semanticscholar.org/paper/20bf8983ffbf650e06409eda68798b8759365c73
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Citations in the corpus
- Immigration and preferences for redistribution in Europe1 (2019, methodology): “A similar ”leave-out” strategy is also used in Burchardi et al. (2018) and Tabellini (2018).”
- Gifts of the Immigrants, Woes of the Natives: Lessons from the Age of Mass Migration (2019, unknown): “Online appendix C2 describes the cross-sectional 23A similar "leave-out" strategy is also used in Burchardi et al. (2019). variation in 1900 immigrant settlements.”