Migration and entrepreneurship of the left-behind: Evidence from Mexico

Type Report
Title Migration and entrepreneurship of the left-behind: Evidence from Mexico
Author(s)
Publication (Day/Month/Year) 2013
URL http://www.lingnan.sysu.edu.cn/seminar/upload/file/20140627/20140627164618201820.pdf
Abstract
There has been evidence on the entrepreneurial behavior of migrants in receiving countries or after they return to home countries, but little research on the entrepreneurship of the leftbehind when migrants are still abroad. Using data from the Mexican Family Life Survey, this paper examines the effect of ongoing migration on the participation of left-behind family members in entrepreneurship. The fixed effects approach is employed to address the endogeneity of migration and potential selection bias. I find striking evidence that the migration shock has a positive impact on family financial condition, thus stimulating the emergence of new entrepreneurs from the left-behind population even in the short term. My analysis also documents the differential effects across gender, with a larger impact of migration going to females. These findings have profound implications for the empowerment of women and how public policies such as microcredit may promote entrepreneurship through the relaxation of financial constraints.

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