Migrant Tenure Abroad and the Differential Impact of Remittances for Entrepreneurship in Developing Countries

Posted: 9 Oct 2019

See all articles by Michael E. Cummings

Michael E. Cummings

University of Arkansas - Sam M. Walton College of Business

David L. Deeds

University of St. Thomas - Opus College of Business; Case Western Reserve University - Department of Marketing and Policy Studies

Paul M. Vaaler

University of Minnesota, Twin Cities - Law School and Carlson School of Management

Date Written: September 27, 2019

Abstract

We use social identity and agency logic to theorize and test hypotheses about how migrants’ different abilities and motivations tied to tenure abroad change the impact of their remittances on venture investment back home. Regression and related analyses of remittances to 33 developing countries from 2001–2010 indicate that, for migrants residing abroad for less (more) than a year, remittances significantly increase new business founding rates (venture-funding availability). Our results suggest that migrants’ tenure abroad shifts remittance-based venture investment activity in ways consistent with shifting importance in migrants’ dual social identities and their related entrepreneurial abilities and motivations. Shorter-term migrants identifying more with their home countries remit to found ventures that provide livelihoods upon their return. Longer-term migrants identifying more with their host countries remit to fund ventures from afar that provide individual financial returns and, perhaps, social returns derived from assisting home-country family members, local communities, and the broader homeland.

Keywords: entrepreneurship, developing countries, migrants, remittances, social identity, agency, tenure

JEL Classification: F22, F23, F65, G24, J15, J16, M13, O16, O43

Suggested Citation

Cummings, Michael E. and Deeds, David L. and Vaaler, Paul M., Migrant Tenure Abroad and the Differential Impact of Remittances for Entrepreneurship in Developing Countries (September 27, 2019). Available at SSRN: https://ssrn.com/abstract=3460442 or http://dx.doi.org/10.2139/ssrn.3460442

Michael E. Cummings (Contact Author)

University of Arkansas - Sam M. Walton College of Business ( email )

Fayetteville, AR 72701
United States

David L. Deeds

University of St. Thomas - Opus College of Business ( email )

1000 LaSalle Avenue
TMH 443
Minneapolis, MN 55403
United States

Case Western Reserve University - Department of Marketing and Policy Studies ( email )

Cleveland, OH 44106
United States

Paul M. Vaaler

University of Minnesota, Twin Cities - Law School and Carlson School of Management ( email )

229 19th Avenue South
Minneapolis, MN 55455
United States
612-625-4951 (Phone)
612-626-1316 (Fax)

HOME PAGE: http://carlsonschool.umn.edu/faculty/paul-vaaler

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