This paper uses a survey of micro-enterprises (fewer than 15 workers) in Mexico (1998 ENAMIN) to examine how migration networks affect the level of capital investment in micro-enterprises. Most of the enterprises included in the study are very small: 60 percent of them hire no employees at all. The authors find that international migration (to the US) is associated with a 35 to 40 percent increase in the level of capital invested in a micro-enterprise. Examining the level of investment by type of asset, the authors find that investment in tools and vehicles are both associated with stronger links to migration networks and international migration.

©2007 Elsevier.