Austrian National Bank finds liberal integration policies are related to greater foreign-direct investment

We find support of the hypothesis that cross-border investments are affected by migration policy. In particular, more liberal institutional settings for immigrants in a host country are ceteris paribus positively related to inward foreign-direct investment from a given parent country. There is no evidence of a systematic impact of parent-country migration policy in outward FDI. We derive this evidence base on a variety of indicators reflecting a country's immigration policy. While the indicators span a broad spectrum of policy aspects such as integration into the labour market and eligibility, they are highly corrleated with each other so that it is not possible to attribute favourable effects to specific indicators.... READ FULL ARTICLE.