Capital Markets, Temporary Migration and Entrepreneurship: Evidence from Bangladesh

Laurent Bossavie, Joseph-Simon Goerlach (), Çağlar Özden and He Wang
Additional contact information
Joseph-Simon Goerlach: Bocconi University
Çağlar Özden: World Bank
He Wang: World Bank
Authors registered in the RePEc Author Service: Joseph-Simon Görlach

No 16662, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper examines international temporary migration as an intermediary step among aspiring entrepreneurs to accumulate the needed capital when they face credit constraints at home. The analysis is based on a representative dataset of lifetime employment histories of return migrants from Bangladesh. After establishing the credit constraints that potential entrepreneurs face, the paper shows that non-agricultural self-employment rates are significantly higher among returning migrants – over half versus around 20% of non-migrants. Most migrants transition into self-employment by using their savings from abroad as the main source of financing. The paper then offers, for the first time, a detailed account of the financial costs and benefits of international migration. Our findings suggest that temporary migration can contribute to structural transformation of lower-income countries by enabling credit-constrained workers to enter into non-agricultural entrepreneurship.

Keywords: risky investment; credit constraints; temporary migration; entrepreneurship (search for similar items in EconPapers)
JEL-codes: J61 O15 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2023-12
New Economics Papers: this item is included in nep-ent, nep-int, nep-lab and nep-ure
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Published - published in: World Development, 2024, 176, 106505

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Related works:
Journal Article: Capital Markets, Temporary Migration and Entrepreneurship: Evidence from Bangladesh (2024)
Working Paper: Capital Markets, Temporary Migration and Entrepreneurship: Evidence from Bangladesh (2023)
Working Paper: Capital Markets, Temporary Migration and Entrepreneurship: Evidence from Bangladesh (2023)
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