Brain gains: a cross-country study on the relationship between remittances and entrepreneurship
by Joshua K. Bedi; Shaomeng Jia; Claudia R. Williamson
International Journal of Entrepreneurship and Small Business (IJESB), Vol. 49, No. 1, 2023

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.

Online publication date: Wed, 21-Jun-2023

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