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

Author

Listed:
  • Jackline Wahba

    () (University of Southampton)

  • Yves Zenou

    () (Stockholm University, Research Institute of Industrial Economics (IFN))

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.

Suggested Citation

  • Jackline Wahba & Yves Zenou, 2009. "Out of Sight, Out of Mind: Migration, Entrepreneurship and Social Capital," CReAM Discussion Paper Series 0930, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  • Handle: RePEc:crm:wpaper:0930
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Social capital; entrepreneurship; selection; savings;

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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