Migrant Tenure and the Venture Investment Use of Remittances to Developing Countries

Abstract

We develop and test hypotheses derived from a theoretical framework grounded in agency, social identity, and acculturation perspectives to explain how migrant tenure abroad changes remittance use for venture investment back home in developing countries. Regression and related analyses of remittances to 29 developing countries from 2001-2010 indicate that remittances from migrants residing abroad for less (more) than a year significantly increase venture founding rates (venture-funding availability). Our results suggest that migrants abroad only briefly retain stronger home-country identity and relationships leading them to remit to agents specifically directed to help found new ventures providing livelihoods to those same migrants upon return. Migrants abroad for many years acculturate more to and identify more with host countries, leading them to remit to home country agents with broader discretion to invest in ventures generating financial and social returns associated with enhancing the welfare of home-country families and communities.