The Role of Cultural Clustering in Attracting New Immigrants

Abstract

This paper argues that new immigrants cluster in culturally homogeneous groups in the host country because of imperfect information. However, a pulling effect exists provided that the cultural communities are not too large. With a panel of migration flows to the major O.E.C.D. countries from the mid 1980s to the mid 1990s, it is shown that the existence of similar cultural communities attracts new immigrants. However, the effect is not homogeneous for all types of source and destination countries. Furthermore, the pulling effect is shown to fall to zero for cultural communities above a certain threshold size. Copyright Blackwell Publishing, Inc 2003

Where Enterprises Lead, People Follow? Links Between Migration and German FDI

“…Agglomeration effects can lead to complementarities as well. In Gross and Schmitt (2003), for instance, factors of production from one source country cluster in specific destination countries because of labor market imperfections.…”

“…To see how agglomeration effects can create a positive relationship between capital and labor flows, consider a model suggested by Gross and Schmitt (2003). In their model, migrants cluster in certain host markets if labor market segmentation supports a higher wage in the migrants' relevant labor market.…”

“…Empirical literature has also tested more directly the implications of theoretical models featuring market imperfections. Recent work by Gross and Schmitt (2003) on migration is particularly interesting from the point of view of this paper because they include proxies for cultural similarity and because they account for non-6 See, for instance, Lane and Milesi-Ferretti (2003) or Hatton and Williamson (2002).…”

“…In addition, flows and stocks of factors are not independent. Rather, the model by Gross and Schmitt (2003) suggests that the attractiveness of countries as destinations for home-country migrants first increases and then decreases in the stock of home-country FDI. These non-linear effects are absent in standard Ricardian models of integration which ignore market imperfections.…”

“…The model by Gross and Schmitt (2003) is interesting for our analysis since it not only suggests a link between stocks and flows of migrants but also a positive relationship between stocks of foreign capital and migration. More specifically, the model has a couple of testable implications:…”