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Paul Vaaler (Carlson school of Management) - Economic Informality and the Venture Funding Impact of Migrant Remittances to Developing Countries

Tuesday, 2 September, 2014 - 12:15 to Tuesday, 2 September, 2014 - 13:45
Campus: Brussels Humanities, Sciences & Engineering campus
Faculty: Social Sciences and Solvay Business School
Building D
Promotiezaal (Promotion Room) D 2.01 (VUB)

Paul M. Vaaler holds the John and Bruce Mooty Chair in Law and Business appointed jointly by the University of Minnesota’s Carlson School of Management and Law School. He studies issues at the intersection of business, law and public policy.  Recently, he has been studying migrants from developing countries and the impact of their remittances on entrepreneurial activity back home.
He received his B.A. in History from Carleton College, his M.A. in Philosophy, Politics and Economics from Oxford University where he studied as a Rhodes Scholar, his J.D. from Harvard Law School, and his Ph.D. from the University of Minnesota.

In his lecture he will talk about the Economic Informality and the Venture Funding Impact of Migrant Remittances to Developing Countries:

'In developing countries, weak institutional capacity to observe and regulate the economy deters
foreign capital inflows vital to venture investment. This informality effect may differ for migrant
remittances, inflows less reliant on formal arrangements. We use institutional and transaction
cost theories to propose that informality shifts migrant remittances toward venture funding.
Analyses in 48 developing countries observed from 2001-2009 support our proposition. When
the informal sector exceeds approximately 46% of GDP, remittances increase venture funding
availability. Migrants and their remittances are vital to funding new businesses and
entrepreneurially-led economic growth in developing countries where substantial informality
deters other foreign investors.'

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