Italian Diaspora and Foreign Direct Investment: A Cliometric Perspective Marina Murat (
[email protected]) (University of Modena and Reggio Emilia and RECent) Barbara Pistoresi (
[email protected]) (University of Modena and Reggio Emilia and RECent) Alberto Rinaldi (
[email protected])♦ (University of Modena and Reggio Emilia) Abstract: Recent economic literature highlights that migrant networks help to overcome the informal barriers that exist in the international markets and boost international investment. Empirical studies on different countries confirm this prediction. This paper estimates (OLS-IV) an econometric model to study the impact of both emigration and immigration on Italy’s bilateral foreign direct investment (FDI). The main result is that only the Italian diaspora has a significant positive effect on Italy’s both inward and outward FDI. A theoretical framework, a profile of the diaspora and of immigration in Italy and some exemplary entrepreneurial histories help to interpret the econometric evidence. Keywords: International investment, migrant networks, entrepreneurial histories JEL: F21, F23, N84 ♦ Corresponding author: Department of Economics, Viale Berengario 51, 41100, Modena, Italy. Tel. ++39 059 2056836. Fax: ++30 059 2056947 More than other European countries, Italy has an important history of mass emigration, dating from the mid-XIX century and, more than other nations, maintains strong links with its diaspora. They concern cultural and social matters, but also citizenship and political affairs. Italian emigrants and their offspring are Italian citizens, vote in the country’s political elections and, since 2006, have their own representatives in parliament. While these ties have become stronger with time, mass emigration has receded and finally reached an end by the beginning of the 1970s.