Impacts of Migration on Foreign Direct Investments

Abstract

The main goal of the thesis is to assess the relationship between migration and FDI within 42 destinations countries and 224 countries of origin. The thesis also examines the role of other factors that affect FDI. In the theoretical part, attention is paid to an overview of theoretical aspects of migration, definitions of basic terms and also summarizes theoretical contributions on impacts of migration on destination- and source-countries. Subsequently, an overview of the results of the empirical literature dealing with the impact of migration on FDI is provided. The last chapter introduces the ordinary least squares method, which was used to estimate the models on which we could assess the relationship between migration and FDI. From the empirical analysis we can confirm that migration has a positive impact on foreign direct investments. Increase in migration would increase the outward FDI into migrants´ countries. Regarding the other important determinants of FDI, the distance between capital cities of selected countries and linguistic distance have negative impact. On the other hand, GDP per capita of the country where FDI goes to has positive impact. Other determinants – the existence of a colonial relationship and the sharing of a common border do not affect FDI.