How does governance factors influence the trade impact of migration and capital flows in the EU?

Abstract

Migration has been a topical issue in the European Union. The Successful exit of the United Kingdom from the European Union and the movement of refugees from the Middle East have drawn a lot of attention to the topic. This study investigates the relationships between trade, governance performance, and migration across 23 European countries from 1998 to 2017. Findings from our sys-GMM regression reveal that migration is negatively related to trade while the relationship between Governance and trade is majorly negative. while real GDP and FDI spur the level of trade openness. It is therefore recommended that; the authorities in the EU review and improve regulatory institutions in the region to enable the growth of the export sector in the region. Also, migrants must be integrated into the EU economy to enable them to contribute high skilled labour services and innovative ideas which will lead to growth in economic activities, especially in the export sector.