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Does Emigration Drain Entrepreneurs?

Author

Listed:
  • Anelli, Massimo

    (Bocconi University)

  • Basso, Gaetano

    (Bank of Italy)

  • Ippedico, Giuseppe

    (University of Nottingham)

  • Peri, Giovanni

    (University of California, Davis)

Abstract

Emigration of young, motivated individuals may deprive countries-of-origin of entrepreneurs. We isolate exogenous variation in a large emigration wave from Italy between 2008 and 2015 by interacting diaspora networks with economic pull factors in destination countries, and find that larger emigration rates reduced firm creation and innovative start-ups. We estimate that for every 100 emigrants, 26 fewer firms were created. An accounting exercise shows that 37 percent of the effect was due to the disproportionate loss of young people. The remaining effect was due to selection into emigration of highly entrepreneurial individuals, as well as negative spillovers on firm creation.

Suggested Citation

  • Anelli, Massimo & Basso, Gaetano & Ippedico, Giuseppe & Peri, Giovanni, 2020. "Does Emigration Drain Entrepreneurs?," IZA Discussion Papers 13390, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp13390
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    More about this item

    Keywords

    innovation; entrepreneurship; brain drain; demography; emigration; EU integration;
    All these keywords.

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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