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We investigate the return decision of students from developing and transition countries who studied in Germany and received support from a scholarship institution. Using a discrete time duration analysis and controlling for economic, political and institutional determinants, we find that individual factors, in particular age and time spent in the host country, have a crucial impact on the return decision. We propose selection criteria and proper contractual arrangements that are liable to induce students to return, thereby fostering the economic development in their home countries.Moreover, we analyze the impact of cultural differences between home and host country on the return decision. Especially graduates from Africa seem to consider cultural differences when deciding whether and when to return.

How Can Scholarship Institutions Foster the Return of Foreign Students?