Remittances as avenue for encouraging household entrepreneurial activities

College

School of Economics

Document Type

Article

Source Title

Journal of International Business Research

Volume

10

Issue

Special Issue, Number 3

Publication Date

2011

Abstract

Temporary labour migration has become a fixture in the Philippines affecting the economic make-up of Filipino households through the significant amount of remittances being sent on a regular basis. This stimulated the economy and improved the well-being of household members through enhanced expenditures in various family sustenance activities. This study highlights how the Overseas Filipino Worker (OFW)-dependent households use the remittances they received in terms of business creation. Human capital and entrepreneurial ideas are accumulated when working overseas, which can be used for business creation such as micro-stores or a more complex business model. Engaging in business further augments household income of OFW households and for most, serve as the incentive for going into business further. By using a qualitative response model approach, this study estimated the effects of remittances on the decision of OFW-dependent households to engage in entrepreneurial activities; and analyzed their behaviour toward business creation. Results provided a framework on their decision-making process regarding the productive use of their remittances. Instead of just spending the money entirely on consumption goods, they could actually use the money to invest in more sustainable income generating activities. Moreover, they will have a better idea on how to go about the creation of income generating opportunities. On the other hand, the government would also have a better idea on how to provide support by helping them manage and grow their earned money.

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Disciplines

Economics | Entrepreneurial and Small Business Operations | Finance and Financial Management

Keywords

Emigrant remittances—Philippines; Entrepreneurship—Philippines; Small business—Philippines—Finance

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