Can Migrants Contribute to Agricultural Technology Diffusion Through Non-monetary Remittances?

While remittances are widely recognized as a critical source of financial support in developing economies, this article argues that migrants also serve as informal agents of technology diffusion by remitting second-hand capital goods such as agricultural machinery that augment local productive capacity. We develop a model in which migrants optimally choose between cash and machinery transfers, factoring in trade costs, recipient capabilities and the visibility of knowledge diffusion. The framework reveals how non-monetary remittances interact with local know-how to generate Hicks-neutral productivity spillovers and identifies the threshold conditions under which remitted machinery becomes the preferred mode of transfer. We show that modest improvements in technological fit, demonstration networks or trade facilitation can substantially expand the viability of capital remittances. The results highlight the prevalence of informal technology flows in migrant-sending countries and underscore the development potential of this often-overlooked transmission channel. Thus, the article contributes to theories of migration, remittances and endogenous technology diffusion by positioning migrants as allocators of productive capital and multipliers of informal innovation.

JEL Classification: F22, O12, O15, O33, Q12