Abstract
In a world of increasing globalization and increasing importance of all channels of international factor movements, the theoretical understanding of the relationship between migration, capital movements, and trade is necessary for both empirical analysis and policy advice. Economists have devoted some effort to the analysis of the relationship between trade and foreign direct investment (Brainard 1997, Blonigen 2001, Markusen 2002) and trade and migration (Gould and Findlay 1994) but less so to the relationship between different types of factor movements. However, the question how FDI affects international labor migration is an important one, since whether capital and labor movements are substitutes or complements yields different policy implications.
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