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Out of sight, out of mind: Migration, entrepreneurship and social capital

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  • Wahba, Jackline
  • Zenou, Yves

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 may lose their social capital, they accumulate savings and experience overseas that increase their chances of becoming entrepreneurs.

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Bibliographic Info

Article provided by Elsevier in its journal Regional Science and Urban Economics.

Volume (Year): 42 (2012)
Issue (Month): 5 ()
Pages: 890-903

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Handle: RePEc:eee:regeco:v:42:y:2012:i:5:p:890-903

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Web page: http://www.elsevier.com/locate/regec

Related research

Keywords: Social capital; Entrepreneurship; Selection; Savings;

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References

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  1. Calvó-Armengol, Antoni & Zenou, Yves, 2003. "Job Matching, Social Network and Word-of-Mouth Communication," IZA Discussion Papers 771, Institute for the Study of Labor (IZA).
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Citations

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Cited by:
  1. Giulietti, Corrado & Wahba, Jackline & Zenou, Yves, 2014. "Strong versus Weak Ties in Migration," IZA Discussion Papers 8089, Institute for the Study of Labor (IZA).
  2. Docquier, Frédéric & Rapoport, Hillel, 2011. "Globalization, Brain Drain and Development," IZA Discussion Papers 5590, Institute for the Study of Labor (IZA).
  3. Démurger, Sylvie & Xu, Hui, 2011. "Return Migrants: The Rise of New Entrepreneurs in Rural China," World Development, Elsevier, vol. 39(10), pages 1847-1861.
  4. Mezger Kveder, Cora Leonie & Flahaux, Marie-Laurence, 2013. "Returning to Dakar: A Mixed Methods Analysis of the Role of Migration Experience for Occupational Status," World Development, Elsevier, vol. 45(C), pages 223-238.
  5. Capuano, Stella & Marfouk, Abdeslam, 2013. "African brain drain and its impact on source countries: What do we know and what do we need to know?," MPRA Paper 47944, University Library of Munich, Germany.
  6. Picard, Pierre M. & Worrall, Tim, 2014. "Is a Policy of Free Movement of Workers Sustainable?," IZA Discussion Papers 8035, Institute for the Study of Labor (IZA).

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