How Emotional Ties Influence the Diaspora to Return

Chapter 6 examines the role of emotional ties in fostering diaspora entrepreneurs to return and invest in their home country. The chapter utilises in-depth interviews with returnee entrepreneurs to B&H, Kosovo, and Montenegro, and draws on the theory of embeddedness. The chapter finds that while entrepreneurship is often considered to be a profit-maximising activity, in the case of returnee entrepreneurs to post-conflict economies, other motivations can be more prevalent. Indeed the analysis demonstrates that for entrepreneurs returning to post-conflict economies, an emotional attachment to the home country is the most important driver of activity. Furthermore, the desire for emotional gains influences investment activities over time, often leading to investment in family and friends, or activities which have a social impact.

Bringing the Diaspora Home

Chapter 4 begins by examining the policy approaches being used in B&H, Kosovo, and Montenegro to engage the diaspora, as well as providing implications for other economies. The chapter demonstrates that diaspora engagement is not always a ‘win-win’ and there are distinct challenges for policy makers in ensuring that it impacts positively on economic development. The chapter shows that mobilising the diaspora is a central strategic priority for economic development in each of the post-conflict economies. Yet strategic vision has not translated into policy practice, and as such the potential importance of the diaspora is currently underdeveloped and characterised by a lack of coordination, in part due to ongoing political fragmentation. At the same time, the fact that the diaspora’s connectivity to their homeland weakens over time means that there is a pressing need for effective, coordinated policy now. The disparate nature of provision which currently exists means that the mobilisation of diaspora investment is not being maximised. While the flow of remittances, which play a significant role in the economies of the Balkans, demonstrates that diaspora connections are in place, the spillover effect produced by the transfer of knowledge is not being adequately harnessed.

Conclusions

Chapter 9 closes the book with a comparative analysis of the key theoretical frameworks employed in the book in order to illuminate the contribution of returnee entrepreneurs to post-conflict economies. As global migration continues to grow, the role of returnees are becoming an ever more important aspect of entrepreneurship research. The chapter articulates the specific components of isolation and assimilation, detailing that while individuals are returning to complex homelands, their contribution is not currently being maximised. They are not assimilated within the economy, often avoiding policy actions designed to engage with them. This will have a lasting impact on the potential of returnees to contribute to their homeland, especially given that the emotional ties of the first generation are stronger than subsequent generations and thus interest in homeland return may diminish over time.

Between Isolation and Assimilation

The chapter introduces key debates related to the role of the diaspora in their home economies, particularly the role that they can play as returnee entrepreneurs. With increased movements of people around the world, the role of transnational economic activity is becoming ever more significant. The chapter shows that the diaspora can be caught between isolation and assimilation. They can be isolated because of their years living abroad, as well as their negative perceptions of the institutional environment at home. Yet many of them also wish to become more assimilated and have an emotional desire to help their home country. Many stay away and do not invest. Those who return later can seek to avoid the negative impact of barriers to entrepreneurship, and can for example avoid government engagement activities as they mistrust policy actors’ intentions. The chapter sets out the implications of these different types of engagement for homeland economies.

Entrepreneurship, the Diaspora, and Return

Chapter 2 outlines the contemporary literature on entrepreneurship and its role in economic development. It then explicitly examines the specific role of returnee entrepreneurship and the potential impacts of returnee entrepreneurship to home countries. The chapter highlights the resurgent interest in entrepreneurship among economic theorists and the increased importance ascribed to entrepreneurship by policy makers. It also demonstrates that often research focuses on entrepreneurs within a country, region, or locality, rather than entrepreneurs who are global actors moving across international borders. Of the research on flows of entrepreneurs outside national borders, the majority of literature focuses on the impacts in host countries (i.e. the country they have emigrated to), rather than their home country (i.e. the country they have emigrated from). This chapter thus builds on this research by setting out the important potential role for returnee entrepreneurs who invest at home and have the potential to fill entrepreneurial gaps.

Engaging Returnee Entrepreneurs Through Institutional Change

Chapter 8 returns the analysis to policy making and institution building. Through in-depth interviews with policy makers and other stakeholders in Bosnia and Herzegovina, Kosovo, and Montenegro, the chapter investigates perceptions of, and progress towards, engaging returnee entrepreneurs. It demonstrates that while policy makers are aware of the importance of emotional ties to home, they have little influence over this, and instead need to focus on the practicalities of improving the institutional environment. The chapter shows that policy emphasis has been placed on formal institutional reform, in particular the regulative framework, rather than ideational politics which emphasises heritage and cultural promotion. Yet in all three countries reforms have been slow. This serves to discourage growing investment from the diaspora as risks are often considered to be too great. Positive reforms are required so that the second generation of migrants do not become more isolated from their parents’ homeland. If that connection is lost, investments will only decrease over time.

Returnee Entrepreneurship and Institutions

Chapter 3 sets out the importance of institutions for fostering entrepreneurship. It demonstrates that formal institutions, defined as rules and regulations, and informal institutions, defined as norms and values, change over time, and that the overall framework can either encourage or hold back entrepreneurship. The chapter builds on contemporary research on institutions to show that post-conflict economies being studied have seen significant change and have thus experienced a ‘path break’ due to the impacts of war and subsequent independence. They have then been required to create new institutional arrangements which seek to foster entrepreneurship and economic development. Importantly for economies which have experienced crisis and significant outward migration, institutions are important if the diaspora are to be attracted home. Weak institutional frameworks will deter return as individuals will weigh the differential risks and returns associated with their home and host countries. This will impact on not only the level of investment in the homeland, but also the types of entrepreneurial activities that are invested in and how they develop over time.

Intention to Return

Chapter 5 examines the strategic responses of diaspora entrepreneurs to institutional challenges, utilising a survey of individuals returning to Kosovo. It shows that instead of engaging their in-between advantage in order to change institutions, diaspora entrepreneurs returning to post-conflict economies often seek to avoid the negative impacts of the institutional environment. This means that they will avoid political involvement, despite the efforts being made to engage them. The chapter also shows that such strategies impact the choices made by diaspora entrepreneurs, often meaning that ventures are kept small to avoid the attention of political actors. The chapter also finds that international experience acts to temper the potential for entrepreneurial activity at home, reflecting how the knowledge gained is not directly replicable at home due to unstable institutions and different business practices.

The Impact of Internal Displacement and External Migration on Institutional Trust

Chapter 7 analyses distinctions between internally displaced versus externally displaced entrepreneurs. The chapter draws on a survey of internally displaced and external migrants, as well as in-depth interviews with returnee entrepreneurs, in Bosnia and Herzegovina (B&H). The chapter shows that internal and external migrants have different levels of trust in home institutions, and that this is related to their exposure to institutional environments abroad. Those migrants who moved abroad are able to compare the home environment to the relative stability they experienced in their host country, meaning that perceptions will be more negative. Internal migrants are more philosophical about the institutional environment, accepting that it is weak and not expecting it to change either. The chapter also shows that individuals with more diverse ethnic networks, caused either by exposure to different groups abroad or by moving into and/or working with different groups at home, will have lower trust in institutions.