Social networks and regional recruitment of foreign labour: Firm recruitment methods and spatial sorting in Denmark**We would like to thank Nikolaj Malchow†M⊘ller, Lene Raunkjær, Maulia Sari, Jens Fyhn Lykke S⊘rensen and seminar participants at the ERSA 2010 Congress in Jönköping for helpful suggestions. We would also like to thank three anonymous referees for helpful comments and suggestions. The usual disclaimer applies. We thank Lene Holbæk and Simon Kleinschmidt Salling for editorial assistance. Funding for the survey from the Employment Region Southern Denmark is acknowledged

This paper tests the hypothesis that social networks are crucial for regional recruitment and inflows of foreign labour. New survey data on 971 firms located in Region Southern Denmark show that the predominant recruitment method of foreign labour was through networks. Danish municipal data from 1997–2006 furthermore reveal spatial sorting since initial shares of employees with a foreign background out of total regional employment predict foreign labour inflow rates to regional employment. Thus, social networks appear crucial for the recruitment and inflows of foreign labour, suggesting that employee referrals and information about vacancies in local job markets are also important for foreign labour.