Back for business: The link between foreign experience and entrepreneurship in Latvia

Abstract

Research shows that return migrants have a higher propensity to set up an entrepreneurial activity or be self-employed compared to non-migrants. We take a multidisciplinary approach and empirically study the case of Latvia as a migration donor country to learn how re-migrants participate in entrepreneurship back at home. We are interested if return migrants can be seen as a vehicle for entrepreneurship development and if it is worth looking at them as agents of business growth and innovation. Not only we measure the fact of being entrepreneurial but also explore sources that contribute to the higher propensity, attitudes to creating own business venture, level of ambitions and population sentiment towards entrepreneurs. Based on a nationally representative adult population survey of 8000 observations, we find that early-stage entrepreneurial activity, established business ownership as well as intrapreneurship for return migrants exceed that of the non-migrant population. The self-perceived capabilities to start business is higher for those who have lived abroad, and fear of failure is lower. Return migrants also have better business networks and higher growth and export ambitions. Latvian return migrant entrepreneurship is not necessity driven but rather motivated by opportunities. Migration experience, length of stay aboard and capital accumulated abroad are found to be significant predictors of probability to become entrepreneur when controlled for socioeconomic and personal factors.