International human capital mobility and FDI: Evidence from G20 countries

Takaoka, Sumiko and Etzo, Ivan (2019): International human capital mobility and FDI: Evidence from G20 countries.

Abstract

Human talent will be (or is already) scarce. We view international students as the source of high-skilled labour force, which satisfies the skill and task requirement of firms, particularly those anticipating overseas expansion, and argue whether the international student stock in a country is an indication of positive future prospect for the acquiror country in cross-border mergers. Using the international students’ stocks between pairs of acquiror countries of origin and target firms’ countries for bilateral mergers and acquisitions (M&A) activities, we exploit the within variation of both bilateral M&A activities and bilateral international student stocks between G20 countries. The formation of human capital signals that potential acquirors can access skilled workers and boosts the bilateral M&A activities. Results further indicate that the marginal effect of international students from target country in acquiror country has larger impact than that from acquiror country in target country.

• Item Type: MPRA Paper
• Language: English
• Keywords: FDI, G20, International students mobility
• Subjects: F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment ; Long-Term Capital Movements; F - International Economics > F2 - International Factor Movements and International Business > F22 - International Migration; G - Financial Economics > G3 - Corporate Finance and Governance > G34 - Mergers ; Acquisitions ; Restructuring ; Corporate Governance

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