Diaspora Ownership and Homeland Firms' Internationalization

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Abstract

Although the contribution of diaspora to international business is becoming more evident, little is known about the channels used by individual firms to benefit from diaspora. In this paper, we propose equity ownership as a form of connection between the homeland firms and diasporans (i.e. diaspora members). Specifically, we draw on the literature on diaspora combined with an owners-as-resources perspective to theorize about how diaspora owners can affect the homeland firm's internationalization. We suggest that the anticipated entry costs deriving from the liability of foreignness faced by homeland firms explain how the impact of diaspora owners varies depending on entry mode. Finally, we compare diaspora owners to other types of foreign owner which we argue have lower levels of motivation and ability to help homeland firms to internationalize, and contribute relatively less to their internationalization than diaspora owners. We test and confirm our predictions using data on 2608 domestically controlled Indian firms and their internationalization in 2006–2012.
Original languageEnglish
Article number100661
JournalJournal of International Management
Volume25
Issue number3
Number of pages15
ISSN1075-4253
DOIs
Publication statusPublished - Sep 2019

Bibliographical note

Published online: 11. January 2019

Keywords

  • Diaspora
  • Immigrants
  • Firm internationalization
  • Cross-border acquisition
  • Export
  • Foreign ownership

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