Title: Brain gains: a cross-country study on the relationship between remittances and entrepreneurship

Authors: Joshua K. Bedi; Shaomeng Jia; Claudia R. Williamson

Addresses: George Mason University, 4400 University Drive, Fairfax, VA 22030, USA ' William D. Hoover School of Accounting, Financial & Information Services, College of Business and Social Sciences, University of Louisiana Monroe, Monroe, Louisiana, USA ' Mississippi State University, 75 B.S. Hood Road, Mississippi State, MS 39762, USA

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.

Keywords: remittances; entrepreneurship; development; immigration; financial inflows; brain drain; brain gain; early-stage entrepreneurship; opportunity-driven entrepreneurship; diaspora investment.

DOI: 10.1504/IJESB.2023.131616

International Journal of Entrepreneurship and Small Business, 2023 Vol.49 No.1, pp.32 - 62

Received: 21 Aug 2019
Accepted: 02 Mar 2020
Published online: 21 Jun 2023 *

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