Ethnic Networks and Location Choice of Immigrants

Abstract

When immigrants concentrate locally, their ethnic capital generates greater economic activity. Immigrants can initially face significant difficulties in settling in and integrating in the economy of the host country, due to information gaps about the local market, limited language proficiency and unfamiliarity with the local culture. Settlement in a region where economic and social networks based on familiar cultural or language factors exist – the presence of ethnic capital – provides an effective strategy for economic integration. As international migration across culturally diverse countries increases, ethnic capital will be an important consideration in managing immigration policies.