A new study suggests welcoming immigrants leads to increased foreign investment.
The more immigrants of a given nationality or culture a country welcomes, the more likely the nation of origin is to invest further down the line, according to the National Bureau of Economic Research.
Investment might come in the long term, as often the ‘push’ factors of migration mean the nation of origin is not in a position to invest short term.
A good example of this is Syria, extremely unlikely to invest any time soon, but with refugees spreading all over the world, including more than 25,000 in Canada, investment could flow in more stable times when citizens are looking for places to put their assets.
Often barriers such as language or complex laws and regulations can be broken down through the social and cultural ties provided by migration, says the study, which you can access here.
“If there’s a personal connection, it’s much easier to overcome all of these problems,” according to Tarek A. Hassan, one of the authors.
The study looked at 130 years of migration to the USA at county level, putting together an economic model to track investment streams.
The results suggest that counties within the US more open to immigrants were significantly more likely to receive investment further down the line.
The numbers showed that doubling the number of immigrants from a given country increases the likelihood of investment by 4 per cent. Ethnic diversity, geographic distance and language barriers also play a part.
“Taken together, our results suggest that receiving migration from a foreign country has a positive long-term effect on the ability of local firms to interact economically with the migrants’ country of origin,” the study says.
Often countries use tax breaks to encourage investment. This study suggests they would be better off welcoming immigrants because of the longer-term gains. History shows investment follows the same paths at migration.
One of the examples used in the study is the Chinese Exclusion Act, an 1882 law banning Chinese immigration to America until 1943. The results suggest 26 per cent more counties in Massachusetts would have benefitted from investment were the law not imposed.
The evidence represents another example of the long-term benefits of immigration, often overlooked by policy makers reacting to immediate economic needs.
A recent study showed the children of immigrants significantly outperform their Canadian peers in terms of both high school and university graduation.
Immigrants are also more likely to own their own businesses than their Canadian-born counterparts.
With a rising tide of anti-immigration politics seemingly sweeping the world in the shape of Britain’s exit of the European Union and Donald Trump running for the US presidency, the powers that be would be well-advised to consider such proven benefits.
Canada’s Liberal government is currently consulting Canadians on how it should shape future immigration policies.
Interested employers: Kindly contact us here to receive further information.
Interested candidates: Find out whether you qualify to Canada by completing our free on-line evaluation. We will provide you with our evaluation within 1-2 business days.
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