Associate Professor Paul Vaaler will present "Immigrant Remittances and the Venture Investment Environment in Developing Countries" Friday, December 3, from 1:30 to 3:00 p.m. in 2-215 Carlson School.
Immigrants from developing countries number in the tens of millions, remit hundreds of billions of dollars annually, and usually include with those remittances guidance about their use. What happens to these financial (money) and social (ideas) remittances? Researchers and policy-makers in development, public policy, and law often hold that remittances to developing countries are used for basic subsistence purposes such as food, shelter, education, and healthcare needs of family and friends back home. Their possible impact on new business funding, start-ups and growth has been largely overlooked.
In response, Vaaler will develop a framework grounded in social knowledge and transaction cost theories to investigate the relationship between immigrant remittances and home country: (1) capital availability, (2) new business creation, and (3) international trade openness. Studying 61 developing countries from 2001 to 2007, he shows that immigrant remittances have positive effects on such entrepreneurial outcomes. These results suggest an important role for immigrants abroad in providing venture capital and ideas for developing countries. Business researchers can and should play a larger role in debates about the impact of immigrants on developing country entrepreneurship, growth, and integration with the world economy.
This presentation is sponsored by the Department of Strategic Management and Organization and the Strategic Management Research Center.