Investment Decisions by Latin American Immigrants in Their
Countries of Origin

Magdalena Rappl
Tennessee Tech University

Section I - Introduction

     The purpose of this investigation is to acquire knowledge on the principal factors influencing the potential and actual business activities considered and pursued by Latin American immigrants in their country of origin.  The secondary purpose is to explore investment feasibility and sustainability based on the behavior of remittance dispatchers in the United States and remittance recipients in Latin American and Caribbean (LAC) countries.
     Section II describes savings and investments in these transnational financial corridors at the margin of established financial markets, in the context of motivational forces and disincentive effects, with emphasis on the perspective of the respondents. It highlights the efforts of transnational migration researchers to monitor, measure and improve information flows associated with the conduct and performance of savers and investors. It consists of a literature review of cross-disciplinary investigations published during the last fifteen years, with emphasis on savings, investments and small business development practices.
     Section III of the investigation consists of applying a Small Business Development framework and reworking it to incorporate the modifications applicable to this twin-tier family decision-making process bridging transnational distances and borders. This phase contains a model of Small Business Development for Latin American and Caribbean family households. The model consists of a flowchart that includes an unorthodox set of transnational family-dynamic variables, as hypothesized by this researcher. The model specifically addresses stability factors, value systems, work experience, and systems of life in addition to the conventional small business development factors. This twin-tier Small Business Development process is in essence an extended family management process that contains multiple optimization processes at two locations. The family management process theoretically is a function of a multiple nature: maximizing the rate of return on migration, on savings, on small business development, on investment; and maximizing the utility of the family. All these processes occur with the same pool of accumulated funds and within the same transnational family unit, mostly at the margins of formal financial intermediation.
     In Section IV this author presents the results of a survey titled Actual and Potential Business Activities in Country of Origin  Designed for LAC Country Immigrants. The responses are the result of a long-term and continuous communications flow between the suppliers of the funds, and the demanders of the funds, as summarized by the suppliers. The flowchart in Section III was custom-developed by assimilating the information compiled in this survey, accentuating the fact that it is the product of an interactive process integrating the researcher, the suppliers and demanders of the funds. 
     The last section, Section V, contains the Summary, Principal Findings, Conclusions and Recommendation, pertaining to the potential and actual investment processes by LAC immigrants in their country of origin.

Section II - Literature Review

     A review of the literature on the topic of remittances to Latin American and Caribbean (LAC) countries over the past decade shows that savings, investment, and small business development by recipients constitute a very small proportion of remittances.  Productive investments, generating income, output, and employment in the remittance receiving culture constitute approximately five percent of net receipts (Lowell, 2003; Sander, 2003; Durand, 1996b; Rappl, 2008).  Additionally, the literature on the use of remittances indicates that seventy-five percent of net receipts are allocated to household consumption, leaving twenty percent for other types of investments such as the construction or improvement of housing, the acquisition of educational services, the purchase of medical services, and, finally, the reduction of household debt (Siri and Delgado, 1995; Boly, 1996; Suro, 2002; Cox, 2003).
     To remittance senders and recipients alike, this household income allocation process is highly rational, in the context of the currently existing low levels of human capital, social capital, and financial capital.  A deficient infrastructure, where potable water, electricity, telecommunications systems, viable road systems, and transportation services are not commonly available or totally reliable, represents a huge barrier for investments.  Additionally, an inefficient financial system, in which access to credit is almost impossible, prevents or delays small business development.  Finally, political instability and the unreliable enforcement of property rights, constitute a major deterrent to investment decisions by recipient households.
     Other reasons cited in the literature for rationally low levels of investment are that remittances usually by-pass the banking system, thus not facilitating savings or financial advice.  Recipients generally do not have a working knowledge of investment opportunities, due to their isolation, and the generalized low levels of confidence in the national and international economic climate (Itzigsohn, 1995; Garcia, 1996).
     Yet, some ethnographic studies show a correlation between remittances and small business development (Portes and Guarnizo, 1990).  This study indicates that former migrants from the Dominican Republic exhibit a larger than average percentage of business ownership, as compared to those who never migrated.
     Another study found that up to one-third of the small businesses in El Salvador received their start-up financial capital from remittance proceeds (Lopez and Seligson, 1990).
     In Mexico, small business development is in large part financed by former migrants who returned with their savings or present migrants who are still remitting (Cornelius, 1990).  One study focuses on the logical connection between small business development and remittances, in which the opening of a business is viewed as a perfectly rational and efficient decision by the family unit.  This decision is facilitated in part by on-the-job training, work experience, technological skills, general education from the migration experience, financial solvency, and the mutually beneficial incorporation of family effort (Massey and Parrado, 1997).
     One study dealing with incentive structures for remittance senders and receivers found that savings, remittances and investments can be encouraged by implementing the following policies (Massey and Basem, 1992).

• Welcoming the unbanked into the banking sector.
• Facilitating dollar-denominated accounts which makes balances impervious to international currency fluctuations.
• Offering a positive interest-rate differential on remittance proceeds.
• Lowering exchange rate charges in the process of conversion of currencies.
• Offering tax exemptions to remitting families.
• Offering lower interest on loans to families who wish to supplement remittances for investment purposes.
• Liberalizing access to commercial and personal credit.
• Offering technical assistance and financial assistance.
• Developing better customer relations.
• Offering step-by-step assistance to Small Business Development.
• Expansion of services into rural and difficult-to-reach areas.

     Another study dealing with incentive structures for senders and receivers of remittances recommends the promotion of the liberalization of travel rules to visit the country of origin, the encouragement of tourism, and the consideration of return migration after retirement (Siri and Delgado, 1995).
     Other researchers discuss the benefits of a larger and more-widespread use of the banking system by remittance senders and recipients.  Remittance deposits could facilitate the extension of loans and investments by bank, could allow the recipient manager of the funds to earn interest, and could provide additional safety for the owner.  In addition, the money transmission process would be more cost effective, thus releasing more remittance funds directly to the recipients (Bascom, 1990).
     One ethnographic study which discusses remittance impediments in rural areas affirms that one major reason for emigration, apart from the search for employment and income opportunities, is that the emigration cohorts are totally unable to obtain credit from the banking system in their country of origin.  They migrate, because they intend their savings to become a substitute for small business loans (Siri and Delgado, 1995).
     Investigations that focus on the motivations for sending remittances to the family left behind have exposed a series of reasons for this behavior (Lucas, 1985).  They include the selfless desire to see the family experience economic progress, as well as the membership in a family and community network that has sponsored the migrant to travel, settle, and obtain training and employment in a new area (Solimanó, 2003; Docquier and Rapoport, 2003; Chami, 2003; Roberts and Morris, 2003; Rappl, 2008).
     In this context, remittances can represent selfless and noble gifts, as well as the honoring of pre-migration arrangements (Roberts and Morris, 2003).  Stated otherwise, remittances have been the driving force for emigration, and in very few occasions a positive externality or a casual afterthought.  In addition, by sending remittances, the dispatchers reinforce their identity as providers, heads-of-households, trustworthy and dependable family members, and establish their image as valuable members in this twin-tier family system both at the point-of-origin and the point-of-destination. In this framework, recipient families have a tendency to save and invest a larger proportion of their non-earned income, than they do of their earned income (Adams, 2002). 
     In some regions, remittances represent a significant source of funding for small business development.  One research effort on Mexican micro-enterprises reveals that close to 25 percent of the start-up capital originated with remittances (Gammeltoft, 2003; Ratha, 2003; Solimanó, 2003).

Section III - Small Business Development Model for the Twin-Tier Transnational Family
(See Model Below)

Section IV - Data Compilation and Analysis
Data Compilation

     The survey titled Actual and Potential Business Activities in Country of Origin was designed by this author specifically for Latin American and Caribbean (LAC) immigrants and their families.  This survey was specifically tailored to produce information on saving and investment practices in these twin-tier family systems.  This survey was conducted on a sample of over one hundred families residing across Tennessee.  It was designed in English, translated into Spanish, and administered in Spanish in several community centers to the suppliers of migradollar funds.
     This survey was designed and conducted in the spring of 2007.  Its design was guided by a small business development framework and the invaluable preamble of a long-standing history of interaction with LAC families expressing their visions and constraints.  All the responses were collected, compiled and standardized by the fall of 2007.  The respondents had several days to understand the questions and their relevance, to gather correct information, to discuss it with their relatives in the United States and LAC, and to formulate their answers, comments, explanations, and suggestions.  Data on the suppliers and demanders of remittance funds alike was gathered by soliciting information from the suppliers of funds.
     The deep-rooted, long-lasting and immutable transnational ties between families, as well as the transparent and meaningful communication flows between them, constitute a valuable and unsurpassable source of credible information providing uniquely reliable insights on transnational financial corridors at the margins of established financial markets.

Data Analysis

Demographics of the Respondents
     In order to understand the principal demographic characteristics of this statistical sample, the respondents were asked how long they had lived in the United States.  The following distribution emerged: Fifty-nine percent of the respondents had lived here less than five years, one-third had lived here between five and ten years, and eight percent, more than fifteen years.  Over 90 percent had lived here less than one decade, confirming that this area is indeed a new settlement area.  Sixty-one percent are single and have not been married.  In this group, some are heads-of-households.  The majority, namely seventy-one percent, are men, and only twenty-nine percent are women.  In terms of their age distribution, the data indicates that over four-fifths are under the age of thirty-nine.

Potential and Actual Business Activity

     Respondents were asked whether their family had considered opening a business in their country of origin, in response to a newly discovered and growing financial solvency and freedom, facilitated by the remittances being sent.
     17 percent responded that their families had definitely considered this opportunity, one-fourth gave a definite “no” as an answer, and 58 percent responded that this was an idea that was being considered by their twin-tier family unit here and overseas, to be carried out overseas.  It became clear to this author from the survey that the creative thinking process of the family unit had evolved past the preliminary vision stage, to the development stage of the thought process.  Hopes and doubts were being aired.  The opportunities to succeed in business, and the threats provoked by economic downturns hampering the ability to service the potential debt to be incurred, were being discussed.  They were beginning to recognize the strengths and limitations of their planning process.  Somehow, this new wave of immigrants seems to possess a stronger entrepreneurial spirit than its predecessors in the form of previous waves of immigrants.
     The first category, namely 17 percent, had already advanced to the stage of development of a business strategy and beyond, as a family unit.  The second category, namely 25 percent, who had not considered with their family overseas to open a business, also had indicated that their family relations were distant.  Ideological differences and personal differences had created a chasm between the family unit at the receiving end overseas and the sending end in the United States.  This lowered or extinguished their desire to remit, their desire to be in a business partnership, and their desire to return to their country of origin.
     Querying further into the developmental stages of this transnational savings and investment process, encouraged by the non-earned income component of their composite family income, the respondents were asked specifically if their family already uses the money from the remittances for a business purpose.  Surprisingly, none stated that they do, 67 percent responded not yet, and 33 percent responded in the near future.  This includes the responses of those immigrants who were not interested in a business partnership with the family left behind, due to ideological differences.  In essence, this author is observing the birthing process of a new wave of micro-enterprises sprouting up in Latin America financed by the steady flow of remittances originating with the transnational immigrant workers in the United States.  This phenomenon provides endless but untapped business opportunities to the financial sectors of both the United States and Latin America.
     Many respondents already knew exactly what types of business activities their families in Latin America would like to pursue in the near future.  Approximately one-quarter indicated that they would invest in the agriculture, farming, and ranching sectors.  Almost none were interested in manufacturing processes.  Almost one-fifth indicated that they would invest in commerce, buying and re-selling, some wholesale and more retail, and possibly importing and exporting.  Likewise, another one-fifth indicated that they are familiar with transportation services, like interstate or international trucking and busing, transportation services in the form of personal cabs, collective cabs and “baronesas,” which is a native bus service or truck service to remote, isolated, and hard-to-reach communities.  These native modes of transportation have overhead compartments for, and are willing to transport, livestock, agricultural products, dairy products, merchandise and luggage, and miscellaneous belonging of the passengers.  More specific responses concerning future potential business ventures are discussed in the sections titled Investment Preferences and Locational Factors with Travel Constraints, and Investment Decisions Contingent Upon Legal Transnational Travel.

Investment Feasibility Based on Remittance Dispatcher and Recipient Behavior

     In order to gain some insight into how realistic these responses are, in terms of feasibility and sustainability, the respondents were asked for how long they do plan to continue sending remittances to their family left behind in Latin America and the Caribbean.
     42 percent indicated indefinitely, and as long as it takes to see their family succeed in achieving a reasonable standard of living, own a home, operate a business, and be self-sufficient.  They would like to see their family become self-sustaining and independent of the low wages paid by employers in LAC, and of the remittances sent by the respondents.   16 percent answered that they would continue sending remittances for a few years, possibly until they returned home.  Another 42 percent indicated they would send remittances only when the family left behind needed it.  This group includes respondents who already have their immediately family living with them.  This group does send irregular and spontaneous remittances, whenever prompted by their relatives.  Saying “No” to a necessity, urgency, or unexpected eventuality is not an option by choice, as stated by the respondents.  None stated that the migradollar sending and receiving life-style would stop soon.  This author was reminded that the principal purpose of transnational migration is to be able to send remittances and become a better provider for the family left behind.
     These responses lend credence to the possibility that the future micro-enterprises do have a reasonably high probability of being well-financed, in the short, intermediate, and long-term ranges, and that their probability of success, in terms of cash flow, is reasonably high.
     Slightly changing focus and re-focusing on the earned income component of this equational system in the context of financial solvency and the ability to start, conduct, and prosper a micro-enterprise, respondents were asked to elaborate on some of the personal, financial and labor practices exhibited by their family left behind.  More specifically, it is necessary to know whether their family in Latin American works less now, due to the recipiency of remittances.
     16 percent indicated that their family worked much less, now that they had a non-earned income component.  34 percent said no, they did not work less; remittances had not altered their labor force habits.  One-half stated that their family worked fewer hours, and not quite as much as before but was still forced to work quite a lot. 
     This preliminary analysis indicates that close to 85 percent of the recipients continue working and have not altered their work habits very much.  This is indicative of a desire for self-sufficiency and a reluctance to become too dependent on the good will of a relative in a distant land.  It is also indicative of rising family income and the possibility for generating savings that can subsequently be used for physical capital investment, such as an investment in a house, land, physical structures, and inventory, or, alternatively, human capital investment.  The key at this stage is targeted financial education in order for the recipients to learn to generate savings methodically and to manage their small surplus of income, in the most efficient way possible.
     Approaching this subject concerning the possible reduction in the number of hours worked by remittance recipients from a different angle, respondents were asked whether their family has stopped working altogether, due to the non-earned income component.
     None of the respondents indicated that the family had stopped working.  67 percent indicated that circumstances have not changed.  Family members continue working, and their hours supplied, for all practical purposes, have not dropped.  33 percent indicated that some family members have stopped working.  They are the older family members who are physically exhausted from years of arduous work, the younger family members who are continuing with their formal education process, in their majority.  A few homemakers in child-bearing age, rearing children on their own, have dropped out of the labor force.  None of the family members left behind show a tendency to quit working.  With these three exceptions, they all continue working.
     Considering the possibility of a newly engendered  financial dependence as a function of the recent remittance-sending phenomenon, this author found it necessary to query the degree of possible financial reliance.  Respondents were asked to what degree they objectively thought their family in Latin America depends on the remittances they send.
     17 percent responded that their family strongly depends on them; 75 percent responded that their family depends some on remittances but would be able to manage precariously without them; and the remainder, namely 8% responded that it does not depend on them.  This last group overlaps almost entirely with the irregularly and spontaneously remittance-sending group.  The previous distribution indicates that close to one-fifth of the remittance receiving families could be extremely vulnerable to upswings and downswings in aggregate economy activity in the United States, and in particular, to labor market changes, employment changes, income changes, and remittance-sending pattern changes of their transnational immigrant benefactors.
.     Another significant factor in the savings and investment process and in the financial portfolio decision-making process is the level of ambition and desire for self-improvement on the part of the relatives who choose to stay behind in this new Latin American and Caribbean migration culture.  Therefore, it is useful to gain insight into the financial mindset of the family left behind.  In order to understand the perception that the respondent has of his family a little better, the mentality of the family left behind, the ability of originators to influence recipients’ decisions, and the ability of originators to transmit newly acquired values and higher goals, the respondents were asked to broach a fairly personal topic.  In this context, the respondents were asked whether they felt that the level of ambition and desire for self-improvement manifested by their family back home have changed.
     84 percent answered that their family has an even larger desire to improve itself since the remittance sender has established himself/herself in the United States.  The newly acquired goals, visions, and standards of the remittance senders eventually become those of the recipients also.  Nearly five-sixths of the family units come to expect a higher quality of life and better conditions, in general.  None indicated a lower level of ambition and self-improvement.  16 percent indicated that their family’s ambition and desire for self-actualization had not changed, either because they already had high expectations for themselves or were somewhat set in their ways.

Investment Preferences and Locational Factors with Travel Constraints

     A locational factor shedding light on which areas are experiencing this relative and absolute upsurge in income is the variable denoting whether they originated from a rural, small town or village, or big city setting.  The arrival of limited prosperity, as expressed by some recipient families, the climb from below-subsistence levels to subsistence levels as expressed by others, and the escape from total poverty as expressed by other groups impacts different environments in different ways:

• The results obtained from this sample indicate that 59 percent lived in a rural environment or totally in the country before they embarked on the migration experience, 25 percent stemmed from small towns or villages, and the smallest proportion, namely 16 percent, originated in big Latin American and Caribbean cities.  It follows that the remittance-sending respondents remit back to their own environments.  The family members left behind usually do not engage in local or intranational migration. The three distinct environments exhibit different savings and investment opportunities.
• Remittance recipients in rural environments tend to indicate a preference for agricultural, farming, ranching, land, and equipment investments.  They also like to invest in baronesas, the native mode of transportation to remote areas.  Due to the low wages, in absolute and relative terms, associated with the agricultural sector, the high unemployment rates, the high barriers to occupational mobility and the large proportion of emigrants, this sector tends to benefit significantly from remittances.
• Remittance recipients in small towns and villages indicate a preference for commercial properties, buying and re-selling businesses, retail stores, personal and collective cab service investments.
• Remittance recipients in large metropolitan areas and cities indicate a preference for wholesale businesses, exporting and importing enterprise, and long-distance trucking investments.

     All three groups manifested a similar interest in a personal family home and an education.  Table 1 summarizes these future potential investment preferences, in the presence of travel constraints.

Alternative Scenario: Investment Decisions Contingent Upon Legal Transnational Travel

     The following section deals with personal financial opportunities for the respondents.  When asked if they would consider opening a business in their country of origin, if they had the opportunity to travel back and forth freely and repeatedly, 84 percent responded that they would definitely do so.  Eight percent said no, and another 8 percent stated that maybe they would, but were not sure.  In summary, fewer than ten percent had no intentions of engaging in a business activity in their country of origin.  The potential for transforming 60 billion dollars of remittances into foreign direct investment, at least in part, is very high, if transnational travel conditions were to be facilitated. 
     When asked what kinds of business opportunities they would be interested in, their responses became very detailed and enthusiastic, and stopped being strongly correlated with their place of origin.  Somewhat surprisingly, their personal direct involvement, due to return migration or frequent travel opportunities, changed their investment preferences.  They were clustered by this author into the groups presented in Table 2.  Many business activities reflect their current occupation, employment type, and level of expertise.  Many respondents have on-the-job training and work experience in these areas.
     On a related subject, when asked whether they would consider investing in a family home for their immediate family or for themselves for vacation purposes or retirement purposes in the future if they had the opportunity to travel back and forth freely, 100% of the respondents answered with a definite yes.  They dream of having a comfortable home with all the amenities prescribed by the American standards of living and architecture.  This opens up the possibility of family re-unification in the country of origin.
     A follow-up question pertains to how interested they are in the economic future of their country of origin.  100% responded that they are very interested.  None replied that they had either very little interest or none at all.  All the responses recorded above are indicative of a very strong connection to their country of origin.
     In closing this section on the possibility of return migration back to Latin America from the United States, remittance dispatchers were asked how close they feel to their family left behind.  92 percent responded that they feel very close, 8 percent indicated that they feel somewhat close to normally close.  None presented the picture of a distant relationship or a completely alienated one.  Considering that family re-unification is a goal for most respondents, it is entirely possible that re-unification might take place outside of the United States, if transnational travel back and forth becomes as reality for them.

Sample-Specific Qualitative Measurement of SBD Progress

     The author concludes this section by returning to the SBD framework.  The 16-Step Program below has been expanded to produce a table containing sample-specific qualitative measurements in the area of future potential SBD progress.  The progress indicator ranging from 0 to 3 for each of the sixteen steps demonstrates that some categories have been heavily analyzed and other areas have not been explored at all by the respondents.  Over 90% of the respondents are recent arrivals who have lived in the United States less than ten years, and are only recently developing an awareness of the potential profitability of SBD.

(See Model Below)
Section V - Summary, Principal Findings, Conclusions, and Recommendations
Summary of Investigation Process

     The purpose of this investigation was to acquire knowledge on the principal factors influencing the potential and actual business activities considered and pursued by Latin American immigrants in their country of origin. The secondary purpose was to explore the degree of investment feasibility and maintainability based on the conduct of the suppliers and demanders of remittance funds.
     This investigation contains a custom-built model of small business development for Latin American and Caribbean households. The model consists of a 16-step program, and includes a set of personal, family, social and system-of-life components, as hypothesized and designed by this researcher.
     The twin-tier small business development process modeled above is in essence a family management process that contains multiple optimization processes at two locations. The household funds management process theoretically is an integrational act of a multiple nature: maximizing the rate of return of small business development while at the same time maximizing the total family need-fulfillment.
     This author developed a survey on potential and actual business activity for LAC immigrants in their country of origin. It was conducted in the spring of 2007 on a group of LAC immigrants residing across Tennessee.

Principal Findings

     The responses gathered from the survey are the outcome of an intense and meaningful  communications flow between the suppliers of funds and the demanders of funds, as expressed by the suppliers to this investigator.   The principal findings are presented below.

• A small but growing proportion of remittances is being allocated to savings and investments.
• Three-quarters of the respondents have considered opening a business in the country of their origin.
• This wave of immigrants possesses a strong entrepreneurial spirit. 
• Only 17% have advanced to the developmental stage or beyond, concerning the opening of a business.
• None of the respondents stated that their family is already using remittance proceeds for a business.
• Preferences concerning future potential investments in their country of origin are correlated with region of origin if free travel is not possible.  If travel were possible, preferences are correlated to personal work experience.

Conclusions

     The respondents have a very clear prescription for ensuring continued economic improvement of their family; culminating in enhanced and stable savings and investments.  Their prescription focuses more on human capital investment in the form of education and health care, and less on physical capital investment in the form of a family business. 

Recommendations

     Based on the analysis of the responses and the principal findings of this investigation, the author advances the following recommendations.

• Offering technical assistance to correspondent banks in LAC in their development of targeted financial education programs for remittance recipients.
• Acknowledging that remittances are personal transfers and that their owners are rational and well-informed optimizers.

References

Adams, Jr., R. H.  2002.  Precautionary saving from different sources of income: Evidence from rural Pakistan. 
     World Bank Policy Research Working Paper No. 2761.  January.  Available at
     http://wds-beta.worldbank.org/external/default/WDSContent-Services/IW3P/IB/2002/02/16/000094946_02020604053250/
Rendered/PDF/multi-page.pdf.
Bascom, W. O.  1990.  Remittance inflows and economic development in selected anglophone Caribbean countries.  Report of
     the Commission for the Study of International Migration and Cooperative Economic Development.  Washington, D.C.:
     Government Printing Office.
Boly, R. C.  1996.  Money transmitters, remittances, exchange rates, and mechanisms for money laundering in the Dominican
     Republic. Prepared for U. S. Embassy Santo Domingo.
Chami, R., Fullenkamp, C., & Jahjah, S.  2003.  Are immigrant remittance flows a source of capital for development? 
     International Monetary Fund Working Paper WP/03/189.  Washington, D.C.: International Monetary Fund.  November. 
     Available at http://www.imf/org/external/pubs/ft/wp/2003/wp03189.pdf.
Cornelius, W.  1990.  Labor migration to the U.S.: Development, outcomes, and alternatives in Mexican sending communities. 
     Report of the Commission for the Study of International Migration and Cooperative Economic Development.  Washington,
     D.C.: Government Printing Office.
Cox, A., & Ureta, M.  2003.  International Migration, Remittances, and Schooling.  NBER Working Paper #9766.  Cambridge,
     MA: National Bureau of Economic Research.  June.  Available at
     http://papers.nber.org/papers/w9766.pdf.
Docquier, F., & Rapoport, H..  2003.  Remittance and Inequality: A Dynamic Migration Model.  Working Paper No. 167. 
     Stanford, CA: Center for Research on Economic Development and Policy Reform.  June.  Available at
     http://scid.stanford.edu/pdf/credpr167.pdf
Durand, J., Kandel, W., Parrado, P., &. Massey, D. S..  1996b.  International migration and development in Mexican
     communities.  Demography 33(2), 249-64.
Gammeltoft, P.  2002.  Remittances and other financial flows to developing countries.  Centre for Development Research
     Working Paper 02.11.  Copenhagen: Centre for Development Research.  August.  Available at
     http://www.cdr.dk/working_papers/wp-02-11.pdf
Garcia, J. J.  1996.  Remesas familiares y relaciones sociales locales: El Caso de San Isidro.  San Salvador: Facultad
     Latinoamerica de Ciencias Sociales.
Itzigsohn, J.  1995.  Migrant remittances, labor markets and household strategies: A comparative analysis of low-income
     household strategies in the Caribbean basin.  Social Forces 74 (2), 633-55.
Lopez, J. R., & Seligson. M.  1990.  Small business development in El Salvador: The impact of remittances.  Report of the
     Commission for the Study of International Migration and Cooperative Economic Development.  Washington, D.C.:
     Government Printing Office.
Lowell, B. L., & De la Garza, R. O.  2000.  The Developmental Role of Remittances in U.S. Latino Communities and in Latin
     American Countries: A Final Project Report.  Report of the Inter-American Dialogue.  Washington, D.C.: Inter-American
     Dialogue.  June.  Available at http://www.thedialogue.org/publications/pdf/lowell.pdf.
Lucas, Robert E. G., & Stark. O.  1985.  Motivations to remit: Evidence from Botswana.”  Journal of Political Economy, 93,(4)
     (October), 901-918.
Massey, D. S., & Basem, L.  1992.  Determinants of savings, remittances, and spending patterns among U.S. migrants in four
     Mexican communities.  Sociological Inquiry 62(2):185-207.
Massey, D. S., & Parrado, E. A.  1998.  International migration and business formation in Mexico.  Social Science Quarterly,
     79:1-20.
Portes, A., & Guarnizo, L.  1990.  Tropical capitalists: U.S. bound immigration and small enterprise development in the
     Dominican Republic.  Migration, Remittances, and Small Business Development: Mexico and CaribbeanBasin Countries
     4  Eds. Sergio Diaz Briquets and Sidney Weintraub.  Boulder: Westview Press.
Rappl, M. 2008.  Remittance patterns to Latin American and Caribbean countries: Sending money to the family left behind. 
     Forthcoming in National Social Science Journal, 2008.
Ratha, D.  2003.  Workers’ remittances: An important and stable source of external development finance.  Chapter 7 in World
     Bank, Global Development Finance 2003, pp. 157-175.  Available at
     http://siteresources.worldbank.org/INTRGDF/Resources/GDF2003-Chapter7.pdf
Roberts, K. D., & Morris, M.D.S..  2003.  Fortune, risk, and remittances: An application of option theory to participation in
     village-based migration networks.  International Migration Review 37 (4), (Winter), 1252.
Sander, C.  2003.  Migrant remittances to developing countries: A scoping study.  Prepared for the U.K. Department of
     International Development.  June.  Available at http://www.bannock.co.uk/PDF/Remittances/pdf
Siri, G., & Delgado, P. A. 1995.  Uso productivo de las remesas familiares en El Salvador.  A Study Prepared for FUSADES
     (January).
Solimanó, A.  2003.  Remittances by Emigrants: Issues and Evidence.  United Nations Economic Commission for Latin America
     and the Caribbean Macroeconomía del desarrollo series no. 26.  Santiago, Chile: United Nations Economic Commission for
     Latin America and the Caribbean, Economic Development Division.  October.  Available at
     http://www.eclac.cl/publicaciones/DesarrolloEconomicso/0/LCL1990PE/lcl1990i.pdf
Suro, R., & Bendixen, S.  2002.  Billions in motion: Latino immigrants, remittances and banking.  Washington, D.C.: Pew
     Hispanic Center.  November 22.  Available at http://pewhispanic.org/files/reports/13.pdf

The 16-Step Small Business Development Program serves as frame of reference for determining and evaluating the developmental stage and the progress achieved within each step.
The 16-Step Program
1	Relative Stability Factors
2	Sense of Responsibility, Savings Habits in the United States, and Purchasing Power in Latin American Countries.
3	Analysis of Personal Value Systems
4	Work Experience, On-The-Job Training, and General Knowledge
5	Personal Mission in Life and What Propels You Forward
6	Preferred Working Style and Preferred Business Style
7	Your System of Life
8	Selecting an Appropriate Business Model
9	Creating a Business Plan
10	Selecting the Legal Organization of Your Business
11	Making Decisions Concerning the Funding of Your Business
12	Additional Logistics for Your Business
13	Choosing the Employees for Your Business
14	Developing a Business Identity
15	Researching Your Market
16	Holistic Approach to Twin-Tier Family Well-Being
Source: M. Rappl, 2007

The 16-Step Program*
	Rational Chronological Progression	Sample-Specific Qualitative Measurement of SBD Progress
1	Relative Stability Factors	3
2	Sense of Responsibility, Savings Habits in the United States, and Purchasing Power in Latin American Countries.	3
3	Analysis of Personal Value Systems	3
4	Work Experience, On-The-Job Training, and General Knowledge	2
5	Personal Mission in Life and What Propels You Forward	3
6	Preferred Working Style and Preferred Business Style	2
7	Your System of Life	2
8	Selecting an Appropriate Business Model	1
9	Creating a Business Plan	1
10	Selecting the Legal Organization of Your Business	0
11	Making Decisions Concerning the Funding of Your Business	2
12	Additional Logistics for Your Business	0
13	Choosing the Employees for Your Business	2
14	Developing a Business Identity	0
15	Researching Your Market	1
16	Holistic Approach to Twin-Tier Family Well-Being	2
Source: M. Rappl, 2007
Progress Indicator:         0  - No attention, time, effort given to this topic; 1 - Low progress level - Minimal focus;         2 -  Medium progress level - Some focus; 3 - High progress level – Considerable and solid focus
17*	Capital formation in the form of Physical, Human, and Intellectual Rights capital was deliberately excluded at this stage.

Table 1
Future Potential Investment Preferences Correlated with Place of Origin.

Table 2
Personal Investment Preference in a Regime of Return Migration or Free Travel
Business Activity Clusters Reflecting Current Occupations, Employment, and Expertise