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

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.