Outflow Migration And Inflow FDI: Alternative Or Complementary?

In recent years, China's position on FDI inflows and outflows of migrants has been at the top of the list in the world. What's the effect of FDI inflow and outflow of migrants of China? Inspired by the answer to "Lucas paradox", the author seeks to study on the link of the two valuables in order to get the true answer. There is an obvious paradox of theoretical and empirical opinion on the relationship between migration (called MIG in the following text) and FDI. The classical economic theory suggests that migration and FDI substitute one another. However, emigrants had play a positive role in the process of drawing FDI into China; and the great majority of empirical literature suggest MIG and FDI complement one another. Schiff (2006, A) had pointed out that a good answer to this issue lie in the study of specific countries. What kind of relation exists between MIG outflow and FDI inflow in China? Especially, is there a different relationship with different skill levels of emigrants in China? Until now, there is little empirical research to answer this issue in China. Therefore, based on the above contraction of theory and experience, exploring the relationship of MIG outflow and FDI inflow in China is the subject of this dissertation.Specifically, the main contents and conclusions of this dissertation are the following:Chapter 1, "introduction", summarizes briefly the reason and significance to choose this subject, and provides the basic concept, the way of thinking, the main innovations, the fault, the structure of this dissertation.Chapter 2, "literature review", provides a comprehensive review of the literature of the relationship between MIG and FDI, and a review of the literature on MIG and the economic development of home countries, and the literature on FDI and the economic development of host countries since the study of the relationship of MIG and FDI are a sub topic of the two above literatures. In addition, this chapter describes possible sources of the data of migrants which is the cornerstone of the empirical study.Chapter 3, "the history and the present of international migration", provides a history background of the study of relationship of MIG and FDI by describing the evolution of MIG and FDI of many countries. Moreover, this chapter analyzes the present status of MIG of the world and China, focusing on the scale and the position of Chinese MIG in the world. This chapter also gives a data background by analyzing the advantages and disadvantages of all kinds of data of migrants.Chapter 4, "the theory analysis of MIG outflow and FDI inflow in China", introduces and expands a general equilibrium model studying MIG and FDI. Then this chapter deducts the mechanism of the interaction of MIG and FDI in China and draws a series of conclusions for China which are the guidelines of later econometrical analysis. The main conclusions are:the low-skilled emigrants have no obvious impact on FDI inflows; but the skilled emigrants promote FDI inflow, under the condition that consumption elasticity of substitution between domestic goods and imported goods is less than the production elasticity of substitution of domestic products.Chapter 5, "the assessments of the total relationship of MIG outflow and FDI inflow in china", constructs a variety of cross-sectional models and Panel model, and uses jointly various kinds of migrants data so that they complement each other, authenticate mutually. The main conclusions are as follows:In the same period MIG outflow and FDI inflow have a complementary relationship in China. Moreover, the degree of this kind of relationship has changed which strengthened from the 80's into 90's and tended to weaken after entering the 21st century. In the different period, the total relationship is consistent with contemporaneous and dynamic complementarity between MIG and FDI. However the latter relationship is not statistically significant. In other words, for China, the contemporaneous complementarity plays a critic role in the total relationship of MIG and FDI.Chapter 6, "the assessments of the stratified relationship of MIG outflow and FDI inflow in china", finds there are different relationship with different skill levels of emigrants, and this relationship is also different for the same period and different period just like chapter 5. The main conclusions are as follows:In the same period, the complementarity between skilled emigrants and FDI is very statistically significant while the complementarity between unskilled emigrants and FDI is not statistically significant. In the different period, there are a contemporaneous and dynamic complementarity relationship between.MIG and FDI, but the latter relationship is not statistically significant. More importantly, the contemporaneous complementarity is determined by the complementarity between skilled emigrants and FDI.Chapter 7, "the analysis of the dynamic path of the interaction of MIG outflow and FDI inflow in china", introduces and expands a continuous time dynamic model based on the experience of China. The main conclusions are as follows:the degree of complementarity is more strong for the temporary MIG; in the long run, there are a good interaction between MIG and FDI in China, i.e. MIG outflow promotes FDI inflow, then lead to less MIG outflow by increasing labor productivity, human capital; so in the end the interaction of MIG outflow and FDI inflow promote economic growth in China. Chapter 8, "the summary the relationship of MIG outflow and FDI inflow in china and the policy suggestion", summarizes the theoretical and empirical conclusions, the international experience of other countries in the history, which provides guidelines for the evolution of the interaction of MIG outflow and FDI inflow in china. In addition, this chapter put forwards a list of policy suggestions based on the conclusions of this dissertation and the literature.Eventually, the conclusions of this dissertation confirm each other, authenticate mutually, which are consistent with the conclusions of the related studies. This dissertation finds China's special conclusions which reflect the experience of China's fast economic growth.