Diaspora's Contribution to Armenia's Economic Development: What Drives the First Movers and How Their Efforts Could Be Scaled Up?

Abstract

This paper is concerned about ways to close the above gap and expand the Diaspora’s contribution to Armenia’s long-term development agenda. The paper has two main inter-related objectives. First, it is to find some common factors that could explain the proactive involvement and dynamics of a small group of Diaspora business people who, contrary to the common trend, have been rather active in and with Armenia. Second, based on these findings, develop recommendations, consistent with the Diaspora’s institutional capabilities, which could help increase the number of such business activists and more generally facilitate the transformation of the mainstream Diaspora interests in Armenia from humanitarian relief campaigns to business initiatives and development projects.

The paper’s analysis is based on the review of the accumulated entrepreneurial experiences of Diaspora business people in Armenia. The main empirical evidence for the paper comes from detailed interviews with a group of Diaspora entrepreneurs, who have been Armenia’s early investors. From the economic theory point of view, these people are the classical first movers – economic agents who are ready to take additional risks and, when successful, are seen by their peers as role models for replication and follow up. In addition, several of our interviewees are influential members of their respective Diaspora communities.

Keywords: Armenia, diaspora, economy in transition

JEL Classification: J61, O15, F22