Migrant Remittances, New Business Creation, Ethnic Diversity, Developing Countries
Örebro University School of Business
This paper examines the moderating influence of home country ethnic diversity in the relationship between migrant remittances and new business creation in developing countries. By employing the theories of transaction cost, social network, social identity, and trust, we argue that ethnic diversity is negatively associated with new business creation; nevertheless, it strengthens the positive association between migrant remittances and new business creation in developing countries. We test our hypotheses on 64 developing countries over an 11-year period (2006-2016). This paper contributes to entrepreneurship literature by emphasizing the importance of home country ethnic diversity in channeling migrants’ remittances to new business creation in developing countries.