Abstract
Migration is a topic that has always attracted the interest of researchers, policy makers, politicians and the simple people as well, primarily because of its social labor and economic dimensions. In this paper we attempt to identify what may be the impact of migration to the capital markets of the countries that receive the migrants. To do that we use an econometric approach, employing linear regression in order to investigate the relationship between the immigration flows, as measured by the number of immigrants and the capital market variables of interest. These are market capitalization (as a percent of GDP and USD billion), bank deposits (as a percent of GDP and USD billion), public debt (as a percent of GDP and USD billion) and net public debt (in USD billion). We use the Stata econometric software to run these linear regressions with Ordinary Least Squares (OLS). We find evidence that the number of immigrants could have a positive impact to the capital markets of the recipient country, as it is positively correlated with the market capitalization, the bank deposits and the public debt.
Highlights
The migration phenomenon is a complex one and needs to be analyzed from many aspects
We use the Stata econometric software to run these linear regressions with Ordinary Least Squares (OLS)
We find evidence that the number of immigrants could have a positive impact to the capital markets of the recipient country, as it is positively correlated with the market capitalization, the bank deposits and the public debt
Summary
The migration phenomenon is a complex one and needs to be analyzed from many aspects. Economists were the first to develop theories on immigration by analyzing its causes and effects. According to the neoclassic economic theory, the wage imbalances among the countries that trigger float increase will continue to exist whereas a new international equilibrium is created where real wages are of the same level in all countries. The first is a low-skilled workforce flow from low-wage countries to high-wage countries. The second is a flow of capital from countries with high wages to countries with low wages.
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