Out of Sight, Out of Mind: Migration, Entrepreneurship and Social Capital

Jackline Wahba and Yves Zenou

No 4541, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The aim of this paper is to investigate whether return migrants are more likely to become entrepreneurs than non-migrants. We develop a theoretical search model that puts forward the trade off faced by returnees since overseas migration provides an opportunity for human and physical capital accumulation but, at the same time, may lead to a loss of social capital back home. We test the predictions of the model using data from Egypt. We find that, even after controlling for the endogeneity of the temporary migration decision, an overseas returnee is more likely to become an entrepreneur than a non-migrant. Although migrants lose their original social networks whilst overseas, savings and human capital accumulation acquired abroad over-compensate for this loss. Our results also suggest that social networks have no significant impact on becoming entrepreneurs for returnees but matter for non-migrants.

Keywords: entrepreneurship; social capital; savings; selection (search for similar items in EconPapers)
JEL-codes: L26 O12 O15 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2009-11
New Economics Papers: this item is included in nep-ara, nep-hrm, nep-mig and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Published - published in: Regional Science and Urban Economics, 2012, 42 (5), 890–903

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Related works:
Journal Article: Out of sight, out of mind: Migration, entrepreneurship and social capital (2012)
Working Paper: Out of Sight, Out of Mind: Migration, Entrepreneurship and Social Capital (2009)
Working Paper: Out of Sight, Out of Mind: Migration, Entrepreneurship and Social Capital (2009)
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