Diaspora Networks, Non-Economic Remittances and Entrepreneurship Development:
Evidence from Some Economies in Latin America
By: Nir Kshetri, Diana Rojas-Torres, Marleny Cardona Acevedo
Kshetri, Nir, Diana Rojas-Torres, and Marleny Cardona Acevedo (2015). "Diaspora Networks,
Non-Economic Remittances and Entrepreneurship Development: Evidence from Some
Economies in Latin America," Journal of Developmental Entrepreneurship 20(1).
*** Electronic version of an article published as Journal of Developmental
Entrepreneurship, Vol. 20, No. 1, 2015, 18 pages https://doi.org/10.1142/S1084946715500053
© World Scientific Publishing Company http://www.worldscientific.com/worldscinet/jde
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Abstract:
Diaspora networks' non-economic remittances in the forms of social, political, cultural and
technical contributions to their homeland play important roles in entrepreneurship and economic
development. In this paper, we examine the effects of such remittances on entrepreneurship
development in economies in Latin America and the Caribbean (LAC). We analyze how factors
such as migrants' skills and education and characteristics of the host country are likely to affect
non-economic remittances and their contribution to entrepreneurship and economic development.
We offer some examples of initiatives taken in the home country and the host country to
maximize the potential non-economic remittances and their impacts on entrepreneurship
development in the home country. A key lesson and take-away that we can gain from
entrepreneurially successful efforts of some economies is that the primary focus of diaspora
policies need to be centered on utilizing various forms of non-economic remittances in
stimulating the quantity and quality of entrepreneurial activity.
Keywords: Diaspora networks | Latin America and the Caribbean | non-economic remittances |
social remittances | technical remittances | political remittances
Article:
1. Introduction
Diaspora networks are playing an important role in the development of entrepreneurship in
developing countries. For instance, Woodruff and Zenteno’s (2007) survey of microenterprises
in Mexico found that about one-third of the capital invested was associated with migration to the
United States. It is argued that economic remittances from diaspora networks play the role of
financial intermediaries in the sense that such remittances enable households and micro-
entrepreneurs to overcome credit constraints and imperfections they face in the financial markets
in developing countries. Households and micro-enterprises receiving economic remittances are
able to invest in human and physical capital, which is likely to stimulate entrepreneurial