The Role of Diaspora Investment in Economic Development: A Case Study of Mogadishu, Somalia

Ismail Hassan Mohamed

doi:10.18535/ijsrm/v14i01.em02

Abstract

This paper investigates the role of diaspora investment in fostering economic development in post-conflict Somalia, focusing on Mogadishu as a case study. Employing a mixed-method approach, the study integrates both qualitative and quantitative data from structured interviews, surveys, and institutional reports. The research introduces a conceptual framework linking diaspora investment (independent variable) with economic development (dependent variable), mediated by human capital and institutional quality and moderated by access to finance. Findings demonstrate that diaspora investment contributes significantly to job creation, entrepreneurship, innovation, and infrastructure improvement in Mogadishu. Diaspora investors have been instrumental in revitalizing key sectors such as real estate, construction, telecommunications, education, healthcare, banking, and hospitality. They also serve as channels of knowledge transfer, modern management practices, and technological diffusion. However, challenges such as political instability, weak governance systems, weak legal and regulatory frameworks, and inadequate access to formal financing mechanisms hinder the full realization of diaspora investment potential. The study concludes that diaspora investors serve as key catalysts for post-conflict economic transformation, bridging global resources with local needs and opportunities. It recommends the establishment of robust institutional frameworks that facilitate diaspora engagement, the formulation of a national diaspora investment policy, improvements in governance and the rule of law, and the development of financial instruments tailored to the diaspora. These steps are necessary to sustain and scale the diaspora’s contribution to Somalia’s long-term development.

Keywords

Diaspora InvestmentEconomic DevelopmentHuman CapitalInstitutional QualityAccess to Finance

References

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[refR-2] Fayol, H. (1916). General and industrial management. Pitman.Google Scholar ↗

[refR-3] House, R. J. (1971). A path-goal theory of leader effectiveness. Administrative Science Quarterly, 16(3), 321–339.Google Scholar ↗

[refR-4] Mayo, E. (1933). The human problems of an industrial civilization. Macmillan.Google Scholar ↗

[refR-5] McGregor, D. (1960). The human side of enterprise. McGraw-Hill.Google Scholar ↗

[refR-6] Northouse, P. G. (2013). Leadership: Theory and practice (6th ed.). Sage Publications.Google Scholar ↗

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[refR-8] Agarwal, S., & Hauswald, R. (2009). Delegation and autonomy in organizational settings. Journal of Corporate Finance, 15(4), 600–616.Google Scholar ↗

[refR-9] Al-Khasawneh, J., & Futa, S. (2013). The impact of leadership styles on job satisfaction among Jordanian university lecturers. International Journal of Business and Management, 8(13), 45–53.Google Scholar ↗

[refR-10] Al-Matouh, A. F. (2003). The role of delegation of authority in administrative efficiency. Journal of Management Studies, 12(4), 27–35.Google Scholar ↗

[refR-11] Baird, K., & Wang, H. (2010). Employee empowerment: Extending the conceptual framework. International Journal of Management Reviews, 12(3), 235–252.Google Scholar ↗

[refR-12] Bartram, T., & Casimir, G. (2007). The relationship between empowerment and performance: A mediating role of motivation. Journal of Managerial Psychology, 22(4), 523–539.Google Scholar ↗

[refR-13] Bogomba, O., Simiyu, A., & Kiptoon, B. (2014). Participation in decision-making and employee commitment in Kenyan organizations. International Journal of Human Resource Studies, 4(1), 28–45.Google Scholar ↗

[refR-14] Brenda, A. (2001). Participative decision-making and job performance: Evidence from corporate organizations. Human Resource Development Quarterly, 12(3), 345–356.Google Scholar ↗

[refR-15] Cliffs, M. (2010). Delegation for effective management performance. Journal of Management and Strategy, 1(2), 87–95.Google Scholar ↗

[refR-16] Harris, A., & Chapman, C. (2002). Democratic leadership in education. Educational Management & Administration, 30(1), 5–19.Google Scholar ↗

[refR-17] Hummayoun, R., & Saif, M. (2010). Impact of empowerment on professional performance in the public sector. Asian Journal of Management, 4(2), 98–105.Google Scholar ↗

[refR-18] Jha, S. (2004). Delegation of authority and superior–subordinate relationships. International Journal of Management Science, 9(1), 45–57.Google Scholar ↗

[refR-19] Karakoc, U., & Yilmaz, A. (2009). Empowerment and its effect on creativity in academic institutions. Journal of Educational Management, 17(4), 99–112.Google Scholar ↗

[refR-20] Kim, S. (2002). Participative management and job satisfaction: Lessons from the public sector. Public Administration Review, 62(2), 231–242.Google Scholar ↗

[refR-21] Ladd, D., & Marshall, V. (2004). Participation in decision-making: A predictor of job satisfaction. Human Relations, 57(3), 248–269.Google Scholar ↗

[refR-22] Laschinger, H., Finegan, J., & Shamian, J. (2002). The influence of empowerment on organizational effectiveness. Journal of Nursing Management, 10(1), 3–15.Google Scholar ↗

[refR-23] Muindi, F. (2011). The relationship between delegation and job satisfaction among employees. Journal of Business Studies Quarterly, 2(4), 1–12.Google Scholar ↗

[refR-24] Ongori, H. (2009). Employee empowerment strategy: A critical examination. African Journal of Business Management, 3(1), 22–27.Google Scholar ↗

[refR-25] Prebensen, N., Woo, E., & Chen, J. (2012). Employee involvement and organizational creativity. Service Industries Journal, 32(13), 2095–2112.Google Scholar ↗

[refR-26] Sim, S., Fineman, S., & Gabriel, Y. (2004). The strengths of informational delegation across cultures. Journal of Cross-Cultural Psychology, 35(3), 392–415.Google Scholar ↗

[refR-27] Wadi, A. (2009). The effect of delegation on employee performance. Middle Eastern Journal of Management, 2(2), 55–63.Google Scholar ↗

[refR-28] Yahaya, R., Osman, A., & Gani, A. (2014). Democratic leadership and productivity in higher institutions. Journal of Applied Management Research, 9(2), 76–88.Google Scholar ↗