Migrant remittances and entrepreneurship: a case study of Kyrgyzstan

Abstract

Migrant remittances to developing countries play a significant role in their national economies. It forms a substantial part of the national income for recipient countries. The recipients distribute the funds in diverse ways including investments, consumption, savings, or starting any entrepreneurial activity. Family business as one form of entrepreneurship, creates self-employment opportunities. Eventually, it can decrease unemployment, positively impact the well-being of households and the national economy benefits from it. Considering all this, this paper will focus particularly on Kyrgyzstan and analyze the relationship between the country's remittance inflow and entrepreneurship activities. The entrepreneurship activities are considered: crop farming enterprises, other agricultural enterprises, individual entrepreneurship, and other enterprises. The analysis will be based on different income levels to see the effect of remittances. The analyses are based on a survey of Life in Kyrgyzstan, panel data for 2016 and 2019. The methodology used in the paper is a logit model with random/fixed effects and interaction term analysis. The obtained results report the probability/likelihood of remittances-receiving households engaging in entrepreneurial activity based on their income levels.