In a global context foreign direct investment (FDI) and migration substitute one another in the matching process between workers and firms. However, as labor flows can lead to the formation of business networks, migration can actually facilitate FDI in the long-run. We first present a stylized...

The gravity model has provided a tractable empirical framework to account for bilateral flows not only of manufactured goods, as in the case of merchandise trade, but also of financial flows. In particular, recent literature has emphasized the role of information costs in preventing larger...

In this paper, we model a developing economy in which individual decisions about education and migration are constrained by capital market imperfections (liquidity constraints). We examine the joint impact of brain drain and international remittances on human capital accumulation in the...