Brain Gains: A Cross-country Study on the Relationship between Remittances and Entrepreneurship

Joshua K. Bedi, Shaomeng Jia, Claudia R. Williamson

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Abstract

This paper asks: do remittances promote entrepreneurship? Remittances have become one of the largest forms of cross-country financial inflows, even exceeding other prominent forms of financial flows, including foreign aid and foreign direct investment (Meyer and Shera, 2017). By directly providing relief, remittances are an important income and capital source for family members of immigrant workers in home countries. We hypothesise and empirically document a positive link between remittances and entrepreneurship rates across countries. Our results suggest that remittances promote early-stage business development, particularly for opportunity-seeking entrepreneurs. In addition, we find that female opportunity driven entrepreneurs and entrepreneurs with a secondary education and from a middle-class background benefit more from remittances.
Original languageEnglish
JournalInternational Journal of Entrepreneurship and Small Business
Volume49
Issue number1
Pages (from-to)32-62
Number of pages31
ISSN1476-1297
DOIs
Publication statusPublished - 2023

Keywords

  • Remittances
  • Entrepreneurship
  • Development
  • Immigration
  • Financial inflows
  • Brain drain
  • Brain gain
  • Early-stage entrepreneurship
  • Opportunity-driven entrepreneurship
  • Diaspora investment

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