From immigrants to local entrepreneurs: understanding the effects of migration on entrepreneurship in a highly informal country

Abstract

PurposeMotivated by a lack of evidence regarding the effect of migration on entrepreneurship in a highly informal country, such as Colombia, this paper has a twofold purpose. First, it explores how Venezuelan immigration affects entrepreneurial activity in Colombian regions. Second, it intends to shed light on this relationship, by distinguishing between formal and informal sectors.Design/methodology/approachWith a sample of 1,776,063 individuals, from the Labor Survey Gran Encuesta Integrada de Hogares (GEIH) from the Departamento Administrativo Nacional de Estadística (DANE), the authors employ an instrumental variable approach to account for the selection of immigrants into locations with more or less desirable conditions.FindingsThe results suggest Venezuelan immigration positively influences self-employment and own-account workers, but negatively affects employers. However, once these immigrants proliferate in the informal sector, the effects increase.Originality/valueThis paper brings new insights into the intersection between immigration, unofficial economies, and entrepreneurship. First, while the prior literature focuses on migration from developing to developed countries, migratory flows between developing economies and its effects on local entrepreneurial activity remain unexplored. Second, although informality is mostly common in developing countries, little (albeit growing) evidence of its role in the relationship between migration and entrepreneurship research exists. Finally, the authors bring together these two phenomena to enhance our understanding of different types of entrepreneurial activities when immigration and informality take place. Policy implications are derived from these insights.

Ethical tensions of migrants in the informal economy in the Global South

“…Studies show that migrants working in the informal economy have had positive impact in the form of higher production levels for firms and increased entrepreneurial activity (Altındağ et al., 2020), but they also replaced native workers in the informal labour markets and reduced wages of those in the informal sector (Ryu & Paudel, 2022). As a result, business owners prefer to hire migrants informally, instead of native informal workers, as they have a lower cost of labour and stronger attachment to low‐paid jobs (Muñoz‐Mora et al., 2022).…”

“…34.5%) (Departamento Administrativo Nacional de Estadística, 2023) and (4) 67.8 per cent rely on informality or their support network to obtain an income (Departamento Administrativo Nacional de Estadística, 2023).Therefore, considering the magnitude of the Venezuelan exodus to Colombia and the ethical tensions experienced by Venezuelans as socio-economic actors in the host country, Colombia provides an appropriate research context to study ethical tensions of migrants in the Global South.In addition, this study context allows a better understanding of Venezuela-Colombia migration and southsouth migration or migration from developing-to-developing country. Furthermore, limited understanding of migration phenomena persists when countries of origin and destination exhibit high levels of informality and institutional fragility(Muñoz-Mora et al, 2022), such as in the cases of Colombia (Departamento Administrativo Nacional de Estadística, 2021) and Venezuela (Marotta Lanzieri, 2021).…”

Incentivizing knowledge institutions for entrepreneurship and society

“…As it can be seen in Appendix 3, even though the number of researchers in public administration is not statistically significant, results hold for both knowledge institutions and entrepreneurship. The lack of significance might be due to the association between self-employment and necessity-driven entrepreneurship (Muñoz-Mora et al, 2022;Puente et al, 2019).…”

Using correlation analysis to examine the impact of Covid-19 pandemics on various socioeconomic aspects: Case study of Indonesia

“…Collectively, the hypothesis offering frames the connections between variables whose outcome is the hypothesis accepted or otherwise. Gaucher et al, 2022;Musikanski et al, 2017;Soylu et al, 2018;Streeten, 1994;Yulia dan Irina, 2020;Salehi et al, 2012;Muñoz-Mora et al, 2022;Melde, 2012;Akin dan Banfi, 2019;Choi et al, 2019;Bhaskaran et al, 2021;Walby et al, 2017;Robinson, 2003;Rakovec-Felser, 2014;Merkin, 2012;Bondestam dan Lundqvist, 2020;Focacci et al, 2022;Patel et al, 2020). Source: modified from Schmidt and Osebold, 2017;Singh, 2013 The operationalization of the above variables decorates nine hypothetical targets based on the premise.…”

“…Figure 1. Conceptual framework (Source: compiled from Varlamovaa danLarionova , 2015; Tapsin dan Hepsag, 2014;Gaucher et al, 2022;Musikanski et al, 2017;Soylu et al, 2018;Streeten, 1994; Yulia dan Irina, 2020;Salehi et al, 2012;Muñoz-Mora et al, 2022;Melde, 2012; Akin dan Banfi, 2019;Choi et al, 2019;Bhaskaran et al, 2021;Walby et al, 2017;Robinson, 2003;Rakovec-Felser, 2014;Merkin, 2012; Bondestam dan Lundqvist, 2020;Focacci et al, 2022;Patel et al, 2020).…”