Money and migration: a regional perspective from China

Money flows reflect overall economic exchanges. Using unique data on cross-province bank transfers in China, we find a positive relation between migration and money flows. The finding is stronger among urban migrants and those with better education. Using historical migration as an instrument, there is causal evidence for our finding. Additional analysis reveals that migrants promote both the trade and the investment components of money flows. This study sheds light on how migrants facilitate economic exchanges between regions.