Investigating the economic contribution of immigrants to New Zealand

Zhang, Yongjia
Fargher, Scott
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Master of Business
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Auckland University of Technology

In an increasingly competitive world market, the key to success for New Zealand is to develop competitive advantages in its advanced industries. Specifically, if it can attract more skilled immigrants it will provide New Zealand with the opportunity to enhance the overall level of human capital, encourage enterprise and innovation, and foster international links, leading to economic growth. However, New Zealand faces a sizeable challenge in the retention of its most skilled immigrants as well as attracting skilled return migration. This dissertation critically reviews the evidence relating to the contribution of immigrants to the New Zealand economy, focusing on key factors critical to economic growth: human capital and innovation, and international trade and direct foreign investment (FDI). It also examines the ‘push and pull’ factors underlying New Zealand migration flows helping us to understand how we can attract and retain immigrants to New Zealand, which in turn, will promote economic growth. A critical review of the relevant literature suggests that: (1) immigrants entering New Zealand are expected to have an effect on the efficiency of the labour force by sharing their knowledge and skills; (2) immigrants are expected to reduce barriers to international trade and influence investment decisions abroad through their connection with their home countries, which in turn will increase New Zealand’s link with global markets; (3) immigrants are expected to facilitate business links and help attract FDI to New Zealand, thus contributing to economic growth; (4) a long-term strategy to deepen New Zealand’s relationship with leading-edge technological countries such as the USA, Japan and Germany may also help to ensure that highly skilled immigrants will choose to live in New Zealand; (5) programs, initiatives and service infrastructure need to be put in place by governments, communities and non-government organizations (NGOs) to help New Zealand attract and retain migration.

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