Interaction of foreign direct investment, international trade and remittances with emigration and immigration

Abstract

This paper studies the international mobility of capital and labour. Using a panel data we analyse how relevant mobility factors, i.e. foreign direct investment, international remittances, exports and imports explain emigration and immigration flows. The sample comprises 112 countries with which Spain had close links between 1998 and 2016 in terms of migration, trade, remittances and investment flows. The results show that there is a positive association between foreign direct investment (FDI), remittances sent and received, Spanish imports and the number of immigrants in Spain. Contrary to what has often been acknowledged in many studies, this relationship has been sustained in the long term. Also, we found a negative link between exports and migration flows. Our results lead us to recommend those strategies and policies that exploit and promote the interaction of mobility factors as they allow companies and employees to diversify their risks and find new trade and investment opportunities