Networks and the location of foreign migrants: evidence for Southern Europe

This paper investigates the effect of co-national immigrant´s communities (social networks) and historical international trade relationships (business networks) on the decision of migrants to locate in a particular province within Italy, Portugal and Spain. We study whether spatial dependence also determines the immigration decision by testing for migration spillover effects across provinces in the destination country and by accounting for the effects of social and business networks in contiguous provinces. We find that social networks enhance immigration of co-nationals, a positive effect that is moderated if neighbor provinces have large co-nationals´ communities. For the case of business networks, neighbor provinces having commercial linkages with the immigrants’ origin country compete as alternative destinations. Thus, the impact of immigration spreads over alternative destinations in the host country, so the coordination of local and national migration policies is required to be fully effective.