Entrepreneurial ecosystems and diaspora: how do remittances and migration affect country of origin early-stage entrepreneurial activity?

Communication and transportation technologies have enabled diaspora communities to engage with the entrepreneurial ecosystems in their countries of origin. Such developments have allowed non-local actors such as diaspora to influence location-bound phenomena such as entrepreneurial ecosystems, particularly in the Global South. We evaluate the influence of migration and remittances on early-stage entrepreneurial activity in seven Balkan countries and seven Latin American countries with sizable diasporas, distinguishing between necessity-driven and opportunity-driven entrepreneurship. We find that migration contributes to a brain drain from the Balkan countries, while remittances arguably mitigate and reverse this effect by stimulating opportunity-based entrepreneurship. The role of the Latin American diaspora in the dynamics of local entrepreneurial ecosystems appears to be weaker. The effect of the diaspora on entrepreneurial ecosystems in the country of origin is much greater when migration flows and remittances are larger in relative terms compared to the total population and size of the local economy rather than in absolute terms.