Diaspora Concentration and the Venture Investment Impact of Remittances

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44 Scopus citations

Abstract

International business ("IB") research has developed theory and preliminary evidence suggesting that remittances from overseas immigrant diasporas enhance home-country venture funding access, particularly in developing countries where a dearth of formal institutional protections deter other foreign investors. I extend this research with theory and evidence linking the geographic concentration of immigrant diasporas abroad to the magnified venture investment impact of their remittances back home. Analyses of remittances to 50 developing counties from 2002 to 2007 show that the venture investment impact of remittances may be completely nullified when coming from geographically-dispersed immigrant diasporas. Diaspora concentration abroad facilitates more effective discovery of venture opportunities back home.

Original languageEnglish (US)
Pages (from-to)26-46
Number of pages21
JournalJournal of International Management
Volume19
Issue number1
DOIs
StatePublished - Mar 2013

Bibliographical note

Funding Information:
I thank the Carlson School Dean's Office for providing valuable financial support for this paper. I am grateful to Mari Sako and Chris Flegg at the University of Oxford's Saïd Business School and to Mark Janes at the University of Oxford's Bodleian Library for time and resources helpful to the completion of this research. Michael Cummings, Mike Kotabe, Florian Täube, Shaker Zahra and two anonymous reviewers provided helpful comments, criticisms and suggestions for revision of this research as did Dali Ma, who offered the same at the October 15, 2011 conference on “Diaspora Investment and Entrepreneurship” at Temple University's Fox School of Business. All errors are mine.

Keywords

  • Diaspora
  • Entrepreneurship
  • Immigrants
  • Transaction costs
  • Venture funding

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