Does international migration help spread global commerce? Recent studies show that international migration influences investment patterns, particularly by facilitating investment from migrants’ host countries back to their countries of origin. However, we explore whether migrants can also attract investment into their host countries. As consumers, migrants shape the market in their host country, and these global networks can influence investment decisions of firms from their home countries.
We focus on the banking sector to identify how international migration attracts foreign investment. First, migrants may prefer using banks from their home countries, especially if they face barriers to financial services in their host country. Second, migrants need financial institutions to send remittances back home. We tested these ideas using a global sample of foreign bank ownership data and found that bilateral migrant networks significantly predict cross-border banking investment. These findings show how market composition affects international investment and highlight the interconnectedness of two globalization aspects: international migration and financial integration.