Document Type

Working Paper

Publication Date


Working Paper Number

WP #09017, July 2009; Old working paper #13095


This paper investigates entrepreneurship of migrants and their location choice in attempt to draw connections between migration and economic development, especially the role of business formation in rural development. Rural entrepreneurship is firstly attempted to be better understood form perspectives of individual people's migration, human capital, social capital and family background. The study uses a recent survey on alumni of Iowa State University. We find that social capital and social networks established in one's home region are shown to be a strong factor in location choice of entrepreneurs. Entrepreneurs from rural origins tend to choose to start their businesses in rural areas in general and half of entrepreneurs migrate back to their home in particular to take local comparative advantages. Rural entrepreneurs are also more likely to obtain financial support from family members, friends and local banks to start a business.

JEL Classification

L26, R11, O15, J24, O18

File Format



30 pages

Included in

Economics Commons