Examining the role of the diaspora in fostering entrepreneurship and institutional change


Project background 

The research examined the role of the diaspora in fostering entrepreneurship and institutional change in their home countries, through a focus on the post-conflict economies of Bosnia and Herzegovina, Kosovo and Montenegro. The role of the diaspora in influencing economic development in their homeland is an under-researched topic. My Research Fellowship has sought to contribute to academic and policy debates by examining why people return home and what impact they have.  

Research overview 

The project involved significant fieldwork in each of the three economies studied, including in-depth interviews with policy makers and other key stakeholders, in-depth interviews with entrepreneurs operating in these economies, and surveys with entrepreneurs.  

Key findings 

Overall the research found that the diaspora face complex institutional challenges associated with post-conflict economies. This means they will face numerous barriers to entrepreneurial activity. Yet despite this, activity does take place and is often due to an emotional attachment to the homeland.  

Emotional ties have multiple impacts on diaspora entrepreneurs’ motivations and activity. In the first instance, emotions equip the diaspora with the motivation to overcome inherent institutional challenges. These emotions mean that diaspora motivations are primarily altruistic and differ from those of traditional entrepreneurs. Altruistic behaviour can be undertaken with the intention to benefit other people but is also driven by personal desire. As such, diaspora entrepreneurs can be motivated to invest by the expectation of an emotional return, which can be either a ‘warm glow’ or a ‘psychic income’. This can lead to investments being made in socially productive activities, where resources are not allocated solely to maximise profits. Indeed, diaspora entrepreneurs aim to have an impact beyond their immediate entrepreneurial activity, and often consider the particular economic and social issues present within their homeland when devising and developing their activities, and often possess non-pecuniary motivations. They will often seek to assist with acute demographic challenges caused by legacies of conflict.  

Publications and outputs