Study of Factors Affecting the Entrepreneurship Behavior of Returned Migrants Using Binary Logistic Regression Model

Abstract

Background: Entrepreneurship or business ownership is a significant source of employment and economic growth. Many studies conducted by different researchers have shown that increase in entrepreneurial activities helps to reduce unemployment. Thousands of Nepalese youths exodus for foreign migration every year for employments due to lack of adequate working environment in Nepal. In this context, identification of significant factors influencing the entrepreneurship behavior of returned migrants could be useful for planner, decision makers, and other concerned authorities.

Objective: To explore the entrepreneurship status of returned migrants and to ascertain the factors influencing the entrepreneurship behavior of returned migrants.

Materials and Methods: This study was based on primary data of 393 returned migrants collected through convenience sampling in Sarawal Rural Municipality of Parasi district, Nepal. People who stayed abroad at least one year and returned during 2010 to 2017 were included in the study. On the basis of Industrial Enterprise Act, 2016a, Nepal, a person who has invested Nepalese rupees five lakh or more in business besides housing and land is considered as an entrepreneur. The response variable is entrepreneurship status and it is defined according to the aforementioned act. Both quantitative and categorical variables were used as predictor variables. Factors associated with entrepreneurship behavior were extracted using Chi-square test and binary logistic regression model.

Results: Out of sample of 393 returned migrants, 137 (34.9%) were entrepreneur and rest 256 (65.1%) were non-entrepreneur. Results showed that for main occupation of household head odds ratio (OR) = 4.008 & confidence interval (CI) = 2.396 to 6.703. Similarly, for educational status of returned migrants OR = 2.650 & CI = 1.599 to 4.392. For the covariate skills learnt at abroad OR = 2.750 & CI = 1.654 to 4.573.

Conclusion: The study revealed that majority of returned migrants were non-entrepreneur. The factors ‘main occupation of household head’, ‘educational status of returned migrant’, ‘remittance received at home per year’ and ‘skills learnt abroad’ are the major determinants behind the entrepreneurship behavior of returned migrants. It is suggested that higher education and adequate skills should be taken before departing from home country so that the migrants can earn more money which will help to start their own businesses once they get back to their home country.