The long run effects of returnees from the emigration to America on Swedish entrepreneurship

The literature provides limited information about which regions Swedish emigration returnees came back to. Existing studies on this topic focus on specific regions such as Västernorrland county (Tedebrand, 1972) or the Bjäre peninsula (Persson, 2007). These studies indicate that a large portion of returnees returned to their home region, in line with “the laws of migration” (Ravenstein, 1885).
Previous research in Swedish economic history that take a deeper interest in individuals tend to focus on case studies of e.g. “great inventors” or others known for their contributions to specific firms (Henricson and Lindblad, 1995, Johnson, 2015, Karlsson and Erséus, 2003). This dramatically reduces possibilities for generalizations. An intermediate approach between large and small scale study is Grönberg (2003) who examines 6,000 engineers working at major Swedish companies during and after the great emigration wave. He shows that approximately 25 percent returned from stays abroad and that the US became an increasingly important country as a source of technological ideas.

Our first research question concerns the understanding of geographical resettlement patterns. We will analyze this using as our base data indexed individuals from the late 1800s to the early 1900s in the whole population that can be followed over time, organized by one of the team members (Eriksson, 2015). We further link this material with registers of emigrants and immigrants to identify returnees. We combine the analysis of regional patterns with a study of the selection of returnees to understand if they differed from others emigrating from the same parish who did not return. Sweden consisted at the time of about 2,500 parishes, a detailed regional unit of observation that ensures that we will pick up very local effects of regional entrepreneurship. The parish level is highly useful as it allows for aggregation at various regional levels. In relation to the first question about resettlement patterns we will also address the question about the entrepreneurial activities of returnees. Entrepreneurial activities take many forms. We apply the distinction between necessity- and opportunity-based entrepreneurship (Wennekers et al., 2005) in order to gain a better understanding of the particular gains obtained from the stay in America. Necessity-based entrepreneurship is typically associated with more regular self-employment activities that we observe in crafting, agriculture or forestry. We will concentrate efforts on looking for patterns of opportunity-based entrepreneurship in our data that benefit from complementarities an individual obtained in terms of human capital or savings accumulated abroad, which could include modernization of e.g. agriculture.

In order to address whether return migration can causally explain variation in regional entrepreneurship, we will exploit exogenous shocks which induced emigration and subsequently resulted in return migration. More specifically we will consider the effect of poor harvests on migration which may be identified through variation in grain prices available in Jörberg (1972).
Our data collection (see next section) for this part focuses on finding information on firm start-ups and type of firm involvement such as sector, subsequent growth indicators as well as inventor data from patents of returnees and to analyze how entrepreneurial activity varied by region and number of returnees.

The second research question deals with the issue of whether we may find long-run effects and persistence of regional entrepreneurship stemming from returnees. We will again focus on opportunity-based entrepreneurs uncovered in the previous stage. We seek to establish the existence of a long-run relationship from the initial impetus to entrepreneurship from returnees on present-day levels of entrepreneurship through econometric analyses. This aims to replicate and infer the degree of stability in entrepreneurship and inventive activities observed in the literature. In addition, this analysis establishes the extent to which returnees are responsible for such a link. This research aims to understand both what types of entrepreneurship that render long-term effects and the size of the returnee flows necessary to generate long-term effects. It is also critical to find relevant indicators for present-day entrepreneurship. For this purpose, we will use a varied set of contemporary data, based on anonymized individual data on Statistics Sweden servers comprising data on self-employment, start-ups and inventors analyzed on the regional level (Ejermo and Hansen, 2015, Xiao, 2014).

For the third research question the ultimate aim is to assess the share of present-day variation in regional entrepreneurship that can, on the one hand, be explained directly through inheritance and, on the other hand, through returnees only indirectly. For analyses of the mediation mechanism for persistence, we will combine two methods. First, we link returnee entrepreneurs to their children through the use of online genealogical trees. Genealogical trees runs automatic online searches that scan others’ existing genealogical trees and links individuals to digitalized church books (see e.g. MyHeritage.com). We will, if needed, complement those scans with information on occupation from marriage records to assess if entrepreneurial traits are inherited over generations. The second important source of data is digitalized archives from 1930 that are to be released in 2018 by the National Archives. These records will be used to complement and verify the material collected in the trees and allow us to effectively link with the other population registers from the earlier period. Concerning entrepreneurship, an important problem is what we mean by “entrepreneurial traits”. Inheritance could involve doing (roughly) the same things as a parent who once started e.g. furniture manufacturing in Sweden based on knowledge and business skills acquired in New York, but could also involve diversifying into related areas, such as wood house manufacturing or a saw mill. It is thus important to note, not just whether a person carries “entrepreneurial traits”, but of what type and whether this takes the form of a new firm establishment or as e.g. business owner of a family firm. We are also looking at inventors, where we might be able to understand whether these individuals invent as employees or independently. Our analyses aim to uncover which types of entrepreneurship mediate most easily through inheritance over the longer run and which do not.