Globalization is not only about the rise of trade, FDI, and migration. It is also about the
changing linkages among these flows. The main findings of the paper can be summarized as
follows. First, at least in the nineties, import trade liberalization fostered not only trade but
also inward investment, confirming that trade and FDI toward developing countries have
become largely complements. Second, the presence of a skilled labour force is a relevant
factor to attract FDI. Moreover, trade policies and the stock of FDI have a positive impact on
the incentives to invest in education. This set of findings highlights the possibility of a low
equilibrium trap where the lack of human capital discourages FDI and inadequate investment
from abroad limits the domestic incentives to acquire education. Rich countries, by
encouraging skilled immigration from relatively poor countries, are definitely aggravating such
a risk. Third, we find little evidence supporting the contrary argument of a brain gain, where
the possibility for skilled workers to migrate abroad raises the return to education and the
investment in human capital. Overall, our results highlight the need to study globalization in a
fully integrated way, not just as the sum of its different components. They also show that
backtracking in one area (e.g. trade) feeds negatively on other areas (e.g. FDI).
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