Sunday, October 7, 2012: 10:00 AM
I develop a model that incorporates firm heterogeneity with international trade, emigration, and FDI in a world with symmetric small open origin and host countries of immigrants. The objective of each origin country is to attract FDI from any host country of immigrants through financing the study abroad education of some of its citizens. I show that each origin country will choose only one host country of immigrants in order to achieve its objective. The host country of immigrants that has the largest, and therefore most productive firms would only suffer temporary immigration after an occurrence of a technological shock. However, in the case of asymmetric additional fixed FDI costs, the origin country of immigrants would choose the host country whose immigration networks are higher. In the case of asymmetric transportation costs, the origin country would prefer the host country of immigrants that is geographically further away.