Immigrant social networks and foreign entry: Australia and New Zealand firms in the European Union and Greater China

Abstract

Based on social networking and ethnic networking theories, this paper presents a theoretical framework that hypothesizes the linkages between immigrant social networks and foreign market entry (FME) strategies for firms operating in the European Union (EU) and Greater China (GC) region. “Immigrant effect” (IE) is used as a proxy for immigrant social networks. IE refers to firms that are owned and/or hired immigrants in key decision-making positions to manage and/or market their products/services in the immigrant's country of origin (COO). The findings of this study reveal that immigrants do play a pivotal role in affecting the choice of FME mode into their respective COO in both EU and GC regions. As such, firms could employ a standardized IE–FME framework across the EU and GC regions. However, the antecedents for choosing an IE are different for both regions, thus suggesting that a different antecedent-IE framework for the EU and the GC regions. The results suggest that both standardized and adapted approaches should be considered when formulating the antecedent-IE–FME framework for the EU and GC regions. The findings of this study has theoretical implications for research pertaining to social network/ethnic network and FME, standardization/adaptation as well as practical implications for firms that seek to use IE in transacting business in the immigrant's COO.