Returnee Entrepreneurs Research Articles

S.03.01 - When she’s gone: oxytocin reverses partner loss-induced passive stress coping

Using a sample of 210 Chinese returnees' entrepreneurial firms, we examined how the overseas ethnic and non-ethnic ties of the returnee entrepreneurs affected their firms' internationalization in the returnees' former host countries. We found that both types of overseas ties were correlated with increased levels of internationalization and they interact positively. We then investigated whether the impacts of overseas ethnic and non-ethnic ties on firm internationalization were moderated by the length of the firms' domestic operations. We found that longer domestic operations were correlated with increased positive impacts of overseas ethnic ties, but decreased positive impacts of overseas non-ethnic ties on firm internationalization. These findings indicate that the returnees' host country ties and firm activity in home country had joint effects on returnee entrepreneurial firms seeking to internationalize their businesses.

Are ‘sea turtles’ slower? Returnee entrepreneurs, venture resources and speed of entrepreneurial entry

We add to neglected research on how venture resources and founder experience outside the home country interplay in facilitating venture creation speed. In particular, we investigate how returnee entrepreneurs influence the role of venture resources in the speed of entrepreneurial entry. Using a novel sample of 388 new ventures covering a range of technologies in China, we find that returnees from abroad are slower in new venture entry in the home country, compared with homegrown entrepreneurs. At the same time, ventures with innovative technology and backed by foreign capital are slower to set up due to higher levels of liability of newness and liability of foreignness. However, when these firms have a returnee founder who can leverage their experience with foreign resources and technological knowhow, such negative effects on entry speed are significantly mitigated. We discuss implications for further research and practice.

A Tale of 'Sea Turtles:' Returnee Entrepreneurship, Institutions, and Firm Performance

Returnee entrepreneurs have contributed to the economic development of their home countries. However, how do these returnee entrepreneurs differ from local entrepreneurs? How do their firms perform relative to local firms? What is the role of local institutions in the performance of returnees’ firms? Answers to these questions remain elusive. Using nationwide surveys of Chinese private firms, we investigate the relationships between returnee entrepreneurship, institutions, and firm performance. Particularly, we distinguish returnees with overseas degrees (RDs) and those with overseas training (RTs). We find that: (1) both firms led by RDs and RTs perform better than those led by local entrepreneurs; (2) RD- and RT-led firms share the competitive advantages of internationalization and RD and (3) local institutions moderate the impact of returnee entrepreneurship on firm performance.

Overseas Business Knowledge Transfer and Firm Performance: the Role of Institutional Conditions

Adopting institutional theory, we examine the moderating effects of institutional factors on the relationship between the overseas business knowledge transferred by returnee entrepreneurs and their venture performance. The findings show that informal institutional differences between the home and host countries strengthen the positive impact of overseas business knowledge on the performance of returnee-founded firms. There is a complementarity between informal institutional differences and local government policy support which jointly enhance the positive impact of overseas business knowledge, whereas a well-developed local business infrastructure substitutes for the impact of variations in informal institutions on the relationship between overseas business knowledge and returnee venture performance.

Linking Periphery with Centre: The liability and usefulness of returnee entrepreneurial firm in home country context

Returnee entrepreneurship has received increasing attention because of its characteristics of innovation, international orientation and performance advantage, but understanding of how returnee entrepreneurial firms achieve desirable entrepreneurial goals in home country context is limited. Drawing on literature on the centre-peripheral dichotomy in international scientific community, this paper attempts to investigate context constraints that influence returnee entrepreneurial firms' innovation and entrepreneurship performance in the home country and to explain how firms deal with these constraints. Based on a longitudinal case study that investigates a successful returnee entrepreneurial firm from China, research findings show that the returnee entrepreneurial firm is able to overcome its peripheral research condition by developing international network connections with researchers at the centre of the international scientific community. However, the firm may not be able to properly respond to the regulatory regime constraints without having a good understanding of the home country and making re-adjustments accordingly. Hence, this study presents a discussion of the usefulness and liability of returnee entrepreneurial firms that influence their entrepreneurship process and performance in the home country.

Human Capital of Returnee Entrepreneurs: A Case Study in China

Returnee entrepreneurs (REs), who left China for education or work experience, accumulate human capital (HC) from their host countries. Such HC may be of benefit when forming new firms on their return to their home country. Insight from an in-depth case study of a service company for legal professionals, formed by three REs in Shanghai, is observed. Data were collected through participant observation and in-depth interviews. Findings indicate a contingency effect of HC. REs’ specific human capital (SHC), leveraged from their ‘host country experiences’, increased their alertness to business opportunities (i.e., opportunity identification). Their general human capital (GHC), leveraged from their ‘home and host country experiences’, prompted the new firm formation (i.e., opportunity exploitation).

The performance of international returnee ventures: the role of networking capability and the usefulness of international business knowledge

This paper sheds light on the international new ventures led by returnee entrepreneurs and investigates the influence of networking capability and the usefulness of international knowledge for the overall performance of so-called international returnee ventures (IRVs). By integrating network theory with a capability view of firm performance, it advances six hypotheses that form a structural model, which is tested with LISREL on a sample of 194 IRVs from China. The findings show that international networking capability has a positive influence on the provision of international business knowledge, which in turn is positively related to the innovation performance, but they have a negative impact on the financial performance. Hence, this study presents a discussion of the usefulness of knowledge gained from the international network relationships of emerging market returnee entrepreneurs.

HUMAN CAPITAL, PERCEIVED DOMESTIC INSTITUTIONAL QUALITY AND ENTREPRENEURSHIP AMONG HIGHLY SKILLED CHINESE RETURNEES

Over the past two decades, returnee entrepreneurs have emerged as major promoters of business startups and entrepreneurship in China. Recognizing their positive impact in promoting new and innovative companies, Chinese national and local governments have instituted a raft of preferential policies aimed at assisting returnee entrepreneurs. Based on a survey of Chinese returnees and returnee entrepreneurship from 2011 to 2012, this paper examines how human capital and perceptions of domestic institutional quality affect entrepreneurial activity among highly skilled returnees. We find their educational levels, overseas work experience, the degree to which they bring back new business models and their perception of domestic economic opportunities affects the likelihood of such individuals becoming entrepreneurs. Our work suggests regulatory transparency discourages returnees from entering entrepreneurship, suggesting the relationship between regulatory transparency and entrepreneurial behavior is more complex than is portrayed in previous research done on this matter. The results of our analysis are robust against a number of rigorous statistical specification checks.

International knowledge brokerage and returnees’ entrepreneurial decisions

Based on the knowledge brokerage literature and the international entrepreneurship literature, we investigate whether returnees’ international knowledge transfer affects their entrepreneurial decisions and the extent to which this relationship is contingent on perceived supportive policies for returnee entrepreneurship and returnees’ difficulties with cross-cultural readjustment in their home countries. Analyzing first-hand survey data, we find a positive relationship between international knowledge transfer and returnees’ decisions to become entrepreneurs. This positive relationship is strengthened by the perception of the home country’s supportive policies for returnee entrepreneurship but is weakened by returnees’ perceived difficulties in readjusting to the local norms and culture in their home countries.

"Returnee social networks, resource acquisition and returnee entrepreneurship"

We contribute to the literature on understanding the different categories of individuals in international entrepreneurship by exploring returnee entrepreneurs as a focal group. Building on social network theory and the international entrepreneurship literature, we examine the mechanisms through which returnee entrepreneurs’ liability of outsidership influences their exploitation of opportunities across national borders. The findings show that resource acquisition mediates the relationship between returnee entrepreneurs’ outsidership and firm performance. In addition, this study identifies the strategic actions that returnee entrepreneurs can take to overcome the inherent liability of outsidership and leverage potential overseas advantages. Returnee entrepreneurs can overcome outsidership through collaborating with local top management team (TMT) members who serve as local brokers and help to capture entrepreneurial opportunities by facilitating resource acquisition. This study extends existing research on...

Does Social Influence Span Time and Space? Evidence from Indian Returnee Entrepreneurs

Research summary We study returnee entrepreneurship through the lens of social influence. Contrary to the conventional view that treats returnee entrepreneurship as discrete decisions by individuals, we examine the transmission of entrepreneurship through important peer networks—university dorm peers and ethnic association networks. We propose enduring effects from peer influence funnelling entrepreneurship entry in distant locations by shaping career aspirations and facilitating resource and information transfer. Using a unique dataset of overseas alumni of a top Indian university, we find strong evidence of the impact of peer influence on the likelihood of returnee entrepreneurship. However, the effect of university peer influence does not extend beyond immediate peer groups in the same cohort. Managerial summary The repatriation of highly skilled migrants has been viewed as important to the supply of entrepreneurial talent in emerging markets. Our study of the overseas alumni of a top Indian university points to the importance of peer influence in determining returnee entrepreneurship. We find that peer ties formed in the early years of university study play a significant role in subsequent career choices and entrepreneurship entry in the home country. We also find co-ethnic professional networks facilitate engagement in returnee entrepreneurship. While policies to encourage returnee entrepreneurship have been geared largely toward promoting formal institutions and economic incentives, our work demonstrates a strong social amplification effect through networks and suggests that peer networks, especially those connecting alumni and ethnic professionals, are important channels to induce returnee entrepreneurship.

Balancing Formality and Informality in Business Exchanges as a Duality: A Comparative Case Study of Returnee and Local Entrepreneurs in China

ABSTRACTThe management paradigms in the West mainly rely on legal contracts and explicit rules (formality), while the management traditions in the East emphasize social relationships and implicit norms (informality). In an era of ‘West-meets-East’, balancing formality and informality is becoming critical for firms, especially those facing institutional differences in transnational contexts and institutional transitions. In this research, we conducted a comparative multicase study on returnee entrepreneurs and local entrepreneurs in China. We found that at the early stage of venturing, returnee entrepreneurs emphasized formality more than informality, while local entrepreneurs stressed informality more than formality. However, the formality-informality balance among both returnee and local entrepreneurs converged over time in line with the institutional transition in China. Returnee entrepreneurs increased the emphasis on informality (but kept the dominant position of formality), whereas local entrepreneurs gradually shifted from informality to formality. The spatial pattern of asymmetrical balancing and the temporal pattern of transitional balancing are both rooted in the Chinese philosophy of Yin-Yang balancing.

Network Benefits for Ghanaian Diaspora and Returnee Entrepreneurs

Objective: The objective of this paper is to investigate how diaspora and returnee entrepreneurs use networks in the country of origin (COO) and country of residence (COR) and which benefits they gain from such networks. Research Design & Methods: In the face of the early state of research and the complexity of the subject, exploratory case study research was chosen. One case was conducted with a Ghanaian diaspora entrepreneur in Germany and the other with a Ghanaian returnee entrepreneur back from Germany. Face-to-face semi-structured interviews with both of the entrepreneurs were conducted to identify their network dynamics. Findings: Ghanaian diaspora entrepreneurs benefit mainly from networks in the COR and Ghanaian returnee entrepreneurs from networks in the COO. These findings are not fully consistent with the assumption of previous scholars that diaspora and returnee entrepreneurs intensively use both COO and COR networks. Implications & Recommendations: The network usage of diaspora and returnee entrepreneurs varies to a large extent depending on industry, personal background and human capital. It is necessary to research more intensively the heterogeneity within diaspora entrepreneurship. Contribution & Value Added: This paper contributes to the development of understanding of heterogeneity in diaspora and returnee entrepreneurship. The cases present that the degree and balance of mixed embeddedness of returnee and diaspora entrepreneurs in COO and COR may differ to a large extent and they influence how they benefit from different type of networks in both countries. This difference may arise from the physical absence/presence of entrepreneurs in the country or the structure of their business. We identified several dimensions to be considered in future research.

How Does Human Capital Travel Across Borders? Evidence from Returnee Entrepreneurs in China

Building on Human Capital Theory, this study investigates the transferability of human capital across national borders, as well as their potential complementarities and conflicts with local knowledge within top management teams. Using new collected data of 147 returnee founded firms in China, we found that human capital specific to overseas contexts is negatively related to venture performance. Moreover, general human capital accumulated overseas benefits venture performance when interacted with local TMT members, while specific human capital accumulated overseas harm venture performance when interacted with local TMT members. These findings contribute to the Human Capital Theory and the research of returnee entrepreneurship.

Social ties and venture creation by returnee entrepreneurs

Recent years have witnessed the return of individuals of Indian or Chinese origin from developed markets to their home countries to start new ventures. Returnee Entrepreneurs (REs) facilitate both direct technology transfer and indirect technology spillovers to local firms, thus contributing to the technological development of emerging economies. Much previous work is based on the integration of ethnic entrepreneurs in their host countries or business activities of transnational entrepreneurs that traverse their host and home countries. This study explores the role of social ties in venture creation by REs. Based on twenty case studies in India, the findings show that (1) local ties are indispensable for venture creation, and (2) the heterogeneity in the way REs leverage social ties across the host and home countries is contingent on the location of their intention to start up and generation of idea for their venture. The implications of these findings are discussed.

"Returnee Entrepreneur, Institutions, and Firm Performance: Evidence from Chinese Private Firms"

Drawing on the entrepreneurship and neoinstitutionalism literature, we investigate how institutional factors and returnee entrepreneurs’ human and social capital jointly influence firm performance. We first innovatively distinguish two types of returnees, returnees with oversea degree education (RDs) and returnees with oversea training experience (RTs), and study their distinct competitive advantages in entrepreneurship. We further examine how the imbalanced institutional development in different regions of China moderates the relationships between the leadership of the aforementioned two types of returnees and their firms’ performance. Applying rigorous econometric methods to nationwide survey data of Chinese private firms, we find that firms led by both types of returnees have significantly better performance than those led by the local. Specifically, firms led by RDs or RTs have competitive advantages in internationalization and R&D investment. In additions, firms led by RDs are advantageous also in hu...

Human Capital and Returnee Entrepreneurship with Market-oriented Institutional Change

Our understanding of institutional change and human capital on returnee entrepreneurship is limited. Human capital will influence returnees’ entrepreneurial activity. However, how the influence differs in a changing institution remains unanswered. Based on an established model of self-selection theory in labor economics, we modeled how institutions shaped the comparative advantages of two important types of human capital on returnee entrepreneurship. Using data from an alumni survey, we find that under an institution with more business opportunities, business experience matters significantly, while under an institution with better intellectual property protection, innovation abilities are more important. The results reveal that different factors determine entrepreneurship during different stages of institutional reform, thus addressing the puzzle of how human capital fosters entrepreneurship under changing institutional environments.

International Knowledge Spillovers and Returnee Entrepreneurship: Evidence from China

Extending the knowledge spillover perspective of entrepreneurship to a transnational context, we investigate the extent to which returnees can fill international knowledge gaps affects their entrepreneurial decisions and the moderation effects of policy support in their home country and their cross-cultural adjustment. By analysing first-hand survey data of Chinese returnees, we find that returnees with new technologies are more likely to become entrepreneurs. Meanwhile, the positive relationship between new technology and returnee entrepreneurial decisions is strengthened by the home country's supportive policies, but is weakened by the difficulties in adjusting to local culture in the home country.

"Frontiers of IM: Connections to Local and Distant Communities: Geography,Cross-border Flows & Entrep"

This symposium comprises presentations of four research projects on the phenomenon of diaspora entrepreneurship. The author teams (6 authors from 3 countries and 5 institutions) will share their latest findings. The diversity of topics (i.e., returnee entrepreneurship and venture formation, immigrant ethnic clustering and firm performance, diaspora legitimacy), theories (i.e., social capital and embeddedness, institutional theory, knowledge flows, organizational ecology), data and methodologies (i.e., pooled time series data, case study, surveys), and country environments (e.g., China, Bosnia-Hercegovina, US) is deliberate and expected to stimulate a rich debate of findings and discussion of critical future developments in the field. This is the first opportunity that each paper will be presented to a scholarly audience; however all the papers are well developed and have interesting analyses of respective data. Additionally, we will provide time in the symposium to invite audience members to share their p...

Learning, firm age and performance: An investigation of returnee entrepreneurs in Chinese high-tech industries

Using unique survey data, this study investigates the impact of the learning of returnee entrepreneurs on firm performance. The findings indicate that returnee entrepreneur experiential and vicarious learning boosts firm performance. However, firm age significantly weakens the impact of learning on firm performance. The results extend the existing literature by explicitly examining the impact of the interrelationship between two forms of learning and firm age.