Migration, trade and investment

By lowering the cost of trade between the country of residence and the country of birth, migrants appear to reduce trade with other countries, so that the overall effect on aggregate trade is small. The effects of migrants on foreign direct investment appear to be different. Bilateral investment patterns show that migrants increase investment between their country of residence and country of birth, but there is no strong evidence that this is accompanied by a reduction of the stock of investment in other countries The views expressed in this paper are those of the staff involved and do not necessarily reflect those of the Productivity Commission.