Nicola D. Coniglio

Climate Variability and International Migration: an empirical analysis

Is international migration an adaptation strategy to sudden or gradual climatic shocks? In this paper we investigate the direct and the indirect role of climatic shocks in developing countries as a determinant of out-migration flows toward rich OECD countries in the period 1990-2001. Contrarily to the bulk of existing studies we use a macro approach and explicitly consider the heterogeneity of climatic shocks (type, size, sign of shocks and seasonal effects). Our results show that the occurrence of adverse climatic events in origin countries has significative direct and indirect effects on out-migration from poor to rich countries.

Intentions to Return of Clandestine Migrants: The Perverse Effect of Illegality on Skills

In this paper we show that highly skilled clandestine migrants are more likely to return home than migrants with low or no skills when illegality causes “skill waste”, i.e. when illegality reduces the rate of return of individual capabilities (i.e. skills and human capital) in the country of destination. In a simple life-cycle framework, illegality is modeled as a tax on skills that reduces the opportunity cost of returning home particularly for the highly skilled. This proposition is tested on a sample of apprehended immigrants that unlawfully crossed the Italian borders in 2003. The estimation confirms that the intention to return to the home country is more likely for highly skilled illegal immigrants. The empirical results of this paper attenuate the common wisdom on the return decisions of legal migrants, according to which low-skill individuals are more likely to go back home (mainly because of negative self-selection).

Policy Design and Rent Seeking: Targeted versus Broad Based Intervention

The present paper analyzes how policy intervention should be designed so as to create industrialization. We focus on whether intervention should be targeted, promoting investment in specific firms or industries, or broad based, increasing the profitability of investment in general. Our main argument is that in areas with weak institutions, broad based policies should be chosen, while in areas with strong institutions, targeted policies may be less costly in moving the economy out of a poverty trap. The targeted policy is attractive because it internalized a demand externality, but is also more exposed to rent seeking, since “picking a winner” involves a greater measure of discretion in policy formulation and implementation. The broad based policy does not discriminate between industries and is, hence, less likely to be captured by rent seekers, but also does not take advantage of the demand externality.

Foreign Direct Investment and Structural Change in Africa: Does Origin of Investors Matter?

The African continent represents the new frontier of global investment flows. The size and geographical coverage of FDI in the continent are steadily increasing with a rather peculiar balance of ‘old’ investors (from OECD countries) and ‘new’ ones (from emerging economies). The goal of this chapter is twofold. First, we discuss the relative importance of traditional OECD investors and ‘new’ investors from BRICS from a macro-level perspective. Second, we use an original micro-level data (African Investor Survey 2010, by UNIDO) to compare these two groups of investors in terms of their development potential. Our analysis sheds novel light on the heterogeneous development impact of FDI in Africa and addresses important policy implications for the attraction of foreign investors into the continent.

Economic Enclaves or Bridges to the Global Economy? Foreign and Diaspora Investments in Developing Countries

This paper examines the main determinants of linkages between foreign and domestic firms in developing countries. Based on existing evidence, we highlight the relevance of linkages generated by MNEs in developing countries and then we discuss the factors which boost or hamper the interactions between foreign and domestic firms and draw some policy implications. A particular attention is given to diaspora investments – i.e. investments carried out by members of the diaspora or return migrants – that represent a potentially powerful engine of growth and structural change in poor countries.

Notes on regional convergence processes in Germany and Spain

The analysis presented in this paper highlights entities, the main characteristics and dynamics of regional gaps in Germany and Spain. In the case of Germany, the geographical distribution of weak regions reflects the existence of a well-known West-East gap. After a first phase of sustained convergence in several indicators (GDP per capita, consumption per capita, productivity), following the devastating shocks represented by the unification, since approximately 1996 a second phase has followed, in which the catching-up process has slowed significantly at the aggregate level, with some particularly critical elements: (i) unemployment in eastern Germany has been higher than in western Germany; (ii) wages and average labour productivity have been lower in the new Lander; (iii) migration flows from East to West has been persistent, in particular among young people. Not to mention the large flows of public resources allocated to the Eastern Lander. In the case of Spain two «neighborhoods» have been identified: one in the South (Andalucia and Extremadura) and one in the North-West (Galicia). Regional gaps (and the relative positions of each region) show a high degree of persistence even when considering a very broad time interval: the top positions in the ranking of regional income (Madrid, Catalonia and the Basque Country) and the bottom ones (Extremadura, Andalucia and Galicia) remain unchanged. The weak internal convergence does not seem, therefore, be an exclusively Italian problem. The persistence over time of regional gaps in terms of income per capita seems to characterize the recent economic history of many countries.

On the Importance of Openness for Industrial Policy Design in Developing Countries

Should industrial policy be targeted to a few sectors or be more broad based and therefore more neutral? Our theoretical analysis demonstrates that access to foreign markets is key to answering this question. We show that in a less open economy, industrial policy should be targeted, while in a more open economy, broad based policies are likely to be more effective. One implication of this results is that deregulation is likely to be more successful in a relatively open economy than in a more closed economy. Indeed, deregulation with limited foreign market access may lead to deindustrialization. We provide empirical results that support these predictions.

Migration and development at home: Bitter or sweet return? Evidence from Poland

The existing economic literature focuses on the benefits that return migrants offer to their home country in terms of entrepreneurship and human and financial capital accumulation. However, return migration can have modest or even some detrimental effects if the migration experience was unsuccessful and/or if the migrant fails to re-integrate into the home country’s economy. In our paper, we empirically show which factors – both individual characteristics and features related to the migration experience – influence the likelihood of a sub-optimal employment of returnees’ human capital employing an original dataset on a representative sample of return migrants in Silesia (Poland).

Human Capital Formation and the Missing Regional Upgrading in the EU Periphery: The Role of Migration and Education-Job Mismatch

Why the supply of human capital (in peripheral regions) does not create its own demand? The aim of this chapter is to shed lights on the complex channels which link human capital investments, spatial mobility and regional upgrading in peripheral regions. We analyse—using original datasets collected by the authors—two different locally funded human capital investment policies implemented by two neighbouring Italian Mezzogiorno regions, Basilicata and Apulia. In the first part of the chapter, we analyse the ‘leakage’ of the human capital associated to this regional policy through out-migration. This first ‘story’ allows us to underline the high risks of failure of policies which push a single ‘side’ of the human capital market, i.e. its supply, without considering measures that at the same time stimulate its demand. The second policy evaluated in this study was implemented by a larger and more industrialized neighbouring region, Apulia (Borse di ricerca). An ex post evaluation of this policy shows that only 10% of the individual beneficiaries is working outside the region. In this case human capital leakage through migration is limited, but our empirical analysis shows that there is a rather severe education-job mismatch in terms of both people being engaged in precarious employment forms (flexible or part-time) and (low) level of competences required in their actual occupation. These two policy cases indicate, in our opinion, that severe market failures characterize the ‘absorption’ of human capital in the local economy rather than its formation.

Strategic Regional Integration

We analyze the impact of globalization on the incentive to strengthen regional integration. In a simple three-country oligopolistic trade model, we demonstrate that increased external competitive pressure may induce governments, inauenced by producer interests, to lower intra-regional trade costs in order to mitigate the effects of external competition on local businesses.