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Trade, FDI and Migration

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  • Fabien Candau

    (CATT - Centre d'Analyse Théorique et de Traitement des données économiques - UPPA - Université de Pau et des Pays de l'Adour)

Abstract

This article provides a theoretical synthesis of the New Economic Geography to analyse the links between trade, FDI and migrations. We find that liberalizing from high trade costs, a country can attract both capital and labour - the bifurcation pattern is a gradual peripheral exodus of worker associated with capital flight from the periphery - but after a threshold of trade costs, opening trade generates return migration toward the periphery while capital remains agglomerated in the core. The model is built on the assumption that factors are sector specific. By relaxing this assumption and by providing a second model where workers are mobile between industries (vertically linked) but also between countries we confirm this result.

Suggested Citation

  • Fabien Candau, 2013. "Trade, FDI and Migration," Post-Print hal-02463456, HAL.
    • Handle: RePEc:hal:journl:hal-02463456
    DOI: 10.1080/10168737.2012.676058
    Note: View the original document on HAL open archive server: https://univ-pau.hal.science/hal-02463456
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    More about this item

    Keywords

    Economic geography; migration costs; FDI;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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