Abstract

Post-conflict economies often prove daunting for foreign investors. Many of these nations are reaching out to diasporans, emigrants, and their descendants living abroad, for much-needed foreign investment capital. Little is known about why diasporans invest in their countries of origin. Recent scholarly inquiry regarding investment decision making has suggested that non-pecuniary, psychological concerns often motivate investment decisions. We develop a conceptual model identifying three types of investment return expectations — financial, emotional, and those related to social status — that may drive diaspora investment interest. We contend that the psychological realities and social-status structure of the diaspora experience generate greater salience for non-pecuniary investment motivations, particularly when the origin country emerges from a period of conflict. We outline an agenda for future research and discuss the implications of our model for policies seeking to promote peace utilizing diaspora investment