The Direction of Foreign Direct Investment and International Migration between Developing and Developed Countries

Despite much research on foreign Direct Investment (FDI), there is seemingly a paucity of research on how international migration is related to inward and outward FDI. Focusing on the macro-level process, this article provides a theoretical rationale that accounts for the flow of FDI between a developing country and a developed country in a different stage. Specifically, we propose that international migration between the developing country and the developed country is increased by inward FDI which causes outward FDI consequentially; moreover, the difference in level of economic development between two countries exogenously influences the relationship. Our article contributes to the literature in the FDI field by providing a causal inference between inward/outward FDI and international migration.