The purpose of this paper is to examine possible types of network formation among immigrants in the diaspora and between those immigrants and the locals in different countries. The authors present the model by considering different possible interactions between immigrants and the new society in their host country. Spread of migrants from the same origin in the diaspora may well increase international trade between the different countries, depending on the types of networks formed. The authors present possible applications of network structure on the country of origin, such as on international trade. The authors find that when the size of the diaspora is sufficiently large, the natives in the different countries will be willing to bear the linking cost with the immigrants because the possible benefits increase with increasing size of the diaspora.
Developing a theoretical approach for the formation of networks in the diaspora.
Those that immigrated first determine the outcome. Policy maker can affect the type of network formed by allocating resources to the first immigrants. They can approve subsidies and tax reductions for international trade. The type of network formed (assimilation, integration, separation or marginalization) affects the level of, and benefits from international trade worldwide, as well as the composition of the imported products. The authors show how leadership is established and how leadership increases over time. More immigrants from the same origin become established all over the world, and new linkages are created with the first immigrant, increasing the possibilities for global trade.
The research in this paper is original.
The authors are grateful to the editor and two anonymous referees for their helpful, constructive and important comments.
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