SEARCH

SEARCH BY CITATION

Abstract  The extended family's role in economic improvement has been extensively debated. From a modernization theory perspective, the extended family is viewed as an institutional obstacle to economic progress, while a social capital perspective suggests that it is an “engine” insofar as it permits individuals to activate networks and pool resources beyond their own. This paper examines, from these perspectives, extended family influences on the use of remittances from transnational migrants. The research asks whether family influences are positive or negative and are more or less important than other factors in determining business investments. The research draws on interviews with 170 family heads in a small community in Pakistan. The results show that relatively little remittance income from family members working in the Middle East was channeled into business investments, despite government incentives offered to migrant households. Most of the extended family measures used in the research are statistically unimportant in explaining level of business investment. There thus appears to be little support for either modernization theory or social capital arguments on the role of the extended family. Of the five operationalized extended family dimensions only one was related to business investment, and that positively. However, “family” considerations are not irrelevant. The best predictors of business investment were a preexisting level of business exposure/experience within the family and whether or not the family head was aware of business investment opportunities. The results raise questions about the need to reconceptualize family influences beyond the formal dimensions of extended family structure.