All Academic, Inc. Research Logo

Info/CitationFAQResearchAll Academic Inc.
Document

Familiarity Breeds Investment: Migrant Networks and Cross-Border Capital
Unformatted Document Text:  21 providing us with more confidence that our earlier results are not due to the omission of variables that are correlated with both bilateral portfolio investment and migrant networks. 18 It is also plausible that investment and migrants move in the same direction; that is, both investment and migrants move from country j to country i with one following the other. We test for this by substituting the migrant stock from country j residing in country i. When we include this latter measure by itself—as we do in table 3—it appears that investment follows migration. This, however, is misleading because when we add migrant stock in both the investing country and the investor country we find that the original result dominates. Table 3 also explores the possibility that it is the information content of migrant networks differs across migrant communities. Drawing on the literature on the economic consequences of social networks we explore the possibility that denser networks are better situated to influence investment through the provision of information (e.g., Smith-Doeer and Powell, 2005). To that end we construct a measure of the density of the migrant network as the ratio of migrants from country i living in country j divided by the total population of country j. When we include this variable we find support for the importance of dense networks for portfolio investment but not for FDI; something that is a likely consequence of the differences across these asset classes. We also performed a number of robustness tests to assess the sensitivity of our specification. As these tests would result in a proliferation of tables we report rather than display the results. First, we experimented with the baseline gravity specification (a) by entering the economic size of countries i and j separately rather than multiplicatively and (b) by including measures of the total population for countries i and j in addition to their economic 18 The inclusion of source and destination dummy variables also causes the effect of bilateral trade to become negative and statistically significant. This again points both to the sensitivity of the relationship between trade and portfolio flows as well as to the problems theorists have had in coming up with definitive models relating factor flows to one another (e.g., Markusen, 1983).

Authors: Leblang, David.
first   previous   Page 21 of 42   next   last



background image
21
providing us with more confidence that our earlier results are not due to the omission of
variables that are correlated with both bilateral portfolio investment and migrant networks.
18
It is also plausible that investment and migrants move in the same direction; that is, both
investment and migrants move from country j to country i with one following the other. We
test for this by substituting the migrant stock from country j residing in country i. When we
include this latter measure by itself—as we do in table 3—it appears that investment follows
migration. This, however, is misleading because when we add migrant stock in both the
investing country and the investor country we find that the original result dominates.
Table 3 also explores the possibility that it is the information content of migrant networks
differs across migrant communities. Drawing on the literature on the economic consequences
of social networks we explore the possibility that denser networks are better situated to
influence investment through the provision of information (e.g., Smith-Doeer and Powell,
2005). To that end we construct a measure of the density of the migrant network as the ratio
of migrants from country i living in country j divided by the total population of country j.
When we include this variable we find support for the importance of dense networks for
portfolio investment but not for FDI; something that is a likely consequence of the differences
across these asset classes.
We also performed a number of robustness tests to assess the sensitivity of our
specification. As these tests would result in a proliferation of tables we report rather than
display the results. First, we experimented with the baseline gravity specification (a) by
entering the economic size of countries i and j separately rather than multiplicatively and (b) by
including measures of the total population for countries i and j in addition to their economic
18
The inclusion of source and destination dummy variables also causes the effect of bilateral trade to become
negative and statistically significant. This again points both to the sensitivity of the relationship between trade
and portfolio flows as well as to the problems theorists have had in coming up with definitive models relating
factor flows to one another (e.g., Markusen, 1983).


Convention
Submission, Review, and Scheduling! All Academic Convention can help with all of your abstract management needs and many more. Contact us today for a quote!
Submission - Custom fields, multiple submission types, tracks, audio visual, multiple upload formats, automatic conversion to pdf.
Review - Peer Review, Bulk reviewer assignment, bulk emails, ranking, z-score statistics, and multiple worksheets!
Reports - Many standard and custom reports generated while you wait. Print programs with participant indexes, event grids, and more!
Scheduling - Flexible and convenient grid scheduling within rooms and buildings. Conflict checking and advanced filtering.
Communication - Bulk email tools to help your administrators send reminders and responses. Use form letters, a message center, and much more!
Management - Search tools, duplicate people management, editing tools, submission transfers, many tools to manage a variety of conference management headaches!
Click here for more information.

first   previous   Page 21 of 42   next   last

©2012 All Academic, Inc.