Abstract
This chapter examines the linkages between Dominican labor migration to the United States and the development of small firms in the Dominican Republic. It aims to explore the possible effects of labor migration on the economic development of the sending country and, especially, of its small-firm sector; and investigates the consequences of successful small enterprise development on both the Dominican migrant outflow to the United States and on return migration. Immigrant entrepreneurs and returnees—such as most respondents in our sample—can carry out, however, other types of transfer, including investment capital and producer goods for use in domestic enterprises. Partners and co-owners of existing enterprises are the single largest source of working capital. Copying the laws used to promote foreign investment, migrant investors in selected sectors should be exempted from paying taxes on incomes resulting from enterprises in which the initial investment is from savings abroad.