Local Institutional Quality and Return Migration: Evidence from Vietnam

This paper examines the link between local institutional quality in the home country and locational choices of international return migrants. We scrutinize the locational choices of Vietnamese return migrants to the south central and the south regions in 2014. Binary and multinomial regression models are fitted to identify the influence of migrants’ individual attributes and the characteristics of regional destinations within Vietnam, with the main focus placed on regional institutional quality. Our analysis reveals that both individual-specific and region-specific variables are significantly related to Vietnamese return migrants’ choices when registering for permanent residency back in their home country. Older migrants are more likely to return to regions other than the central city, as are male migrants. More remarkably, we provide compelling evidence of the positive role of institutional quality at the local level in these migration decisions. Moreover, the effect of institutional quality differs by the characteristics of migrants: regions with better institutional quality are more attractive to younger return migrants, and to those who returned from host countries with better institutional quality. Our findings are strongly robust across different econometric specifications and alternative measures of host country institutional quality at the national level.