Returnee Liability in Developing Countries : the Experience of Returnee Entrepreneurs operating in the Technology-Enabled SME sector in Nairobi, Kenya

Abstract

This study explores the barriers and constraints that confront returnee entrepreneurs in developing countries in Africa. It focuses on ‘returnee liability’; the emerging evidence in returnee studies indicating that individuals going back to set up new ventures in their home countries may not always successfully exploit their entrepreneurial potential. The study argues that returnees seeking to set up and run new ventures in developing countries in Africa are likely to suffer ‘returnee liability’ as a consequence of several interrelated factors that bar them from access to resources from the home environment. Through a narrative inquiry into the experiences of returnee entrepreneurs operating in Nairobi- Kenya, the findings confirm the presence of returnee liability which is experienced at two distinct levels; the institutional and the interpersonal level. While a majority of the returnees are able to overcome their institutional level liabilities through rhetoric strategies and symbolic action that convey legitimacy, the interpersonal liabilities remain a great challenge; creating information asymmetries and raising transaction costs for the returnees, to the advantage of local entrepreneurs who have never left the country. The findings of this study should expand our understanding of the migration – development nexus in the context of developing countries in Africa and be a reference point for returnees seeking to develop new ventures in their home countries. Furthermore, they could guide strategic policy interventions towards ‘brain gain’ strategies for technological upgrading and enhanced economic development in countries operating behind the technological frontiers.