The hub continent. Immigrant networks, emigrant diasporas and FDI

This paper studies the relations between bilateral FDIs and immigrant networks of France, Germany, UK, Italy and Spain, and the emigrant diasporas of Italy and Spain. It focuses on skilled and unskilled immigrants and on ties with developing and developed countries. Results evidence two different network models: FDIs of UK, Germany and France are prompted by the ties of skilled immigrants, while those of Italy and Spain are only influenced by their respective diasporas. The disparity may stem from history. Differently from the findings of previous literature, the effects of networks with developing countries are similar to those with rich economies.

► This paper studies the effects of immigrant networks on the bilateral FDI of France, Germany, Italy, Spain and the UK, and, for Italy and Spain, also of the emigrant diasporas.
► By using five different datasets, it tests econometrically the effects of skilled and unskilled immigrants and of networks linked to developing and developed countries.
► Results show that the FDIs of the UK, Germany and France are affected by the networks of skilled immigrants, while those of Italy and Spain are prompted only by the emigrant diasporas.
► Networks linked to OECD and non-OECD countries have similar effects.