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Diasporas and Domestic Entrepreneurs: Evidence from the Indian Software Industry

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  • Ramana Nanda

    ()
    (Harvard Business School, Entrepreneurial Management Unit)

  • Tarun Khanna

    ()
    (Harvard Business School, Strategy Unit)

Abstract

This study explores the importance of cross-border social networks for entrepreneurs in developing countries by examining ties between the Indian expatriate community and local entrepreneurs in India's software industry. We find that local entrepreneurs who have previously lived outside India rely significantly more on diaspora networks for business leads and financing. This is especially true for entrepreneurs who are based outside software hubs - where getting leads to new businesses and accessing finance is more difficult. Our results provide micro-evidence consistent with a view that cross-border social networks play an important role in helping entrepreneurs to circumvent the barriers arising from imperfect domestic institutions in developing countries.

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File URL: http://www.hbs.edu/research/pdf/08-003.pdf
File Function: Revised version, 2009
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Bibliographic Info

Paper provided by Harvard Business School in its series Harvard Business School Working Papers with number 08-003.

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Length: 30 pages
Date of creation: Jun 2007
Date of revision: Feb 2009
Handle: RePEc:hbs:wpaper:08-003

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Keywords: Diasporas; Informal Networks; Institutions; Entrepreneurship.;

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Citations

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Cited by:
  1. Ghani, Ejaz & Kerr, William R. & Stanton, Christopher, 2013. "Diasporas and outsourcing : evidence from oDesk and India," Policy Research Working Paper Series 6403, The World Bank.
  2. Ajay Agrawal & Devesh Kapur & John McHale, 2008. "Brain Drain or Brain Bank? The Impact of Skilled Emigration on Poor-Country Innovation," NBER Working Papers 14592, National Bureau of Economic Research, Inc.
  3. Frederic Docquier & Hillel Rapoport, 2011. "Globalization, brain drain and development," CReAM Discussion Paper Series 1108, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  4. Inci, Eren & Parker, Simon C., 2012. "Financing Entrepreneurship and the Old-Boy Network," IZA Discussion Papers 6288, Institute for the Study of Labor (IZA).
  5. Frédéric Docquier & Hillel Rapoport, 2009. "Documenting the Brain Drain of "La Crème de la Crème"," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 229(6), pages 679-705, December.
  6. Kenney, Martin & Breznitz, Dan & Murphree, Michael, 2013. "Coming back home after the sun rises: Returnee entrepreneurs and growth of high tech industries," Research Policy, Elsevier, vol. 42(2), pages 391-407.
  7. William R. Kerr, 2013. "Heterogeneous Technology Diffusion and Ricardian Trade Patterns," Harvard Business School Working Papers 14-039, Harvard Business School.
  8. Agrawal, Ajay & Kapur, Devesh & McHale, John, 2008. "How do spatial and social proximity influence knowledge flows? Evidence from patent data," Journal of Urban Economics, Elsevier, vol. 64(2), pages 258-269, September.
  9. William R. Kerr, 2013. "U.S. High-Skilled Immigration, Innovation, and Entrepreneurship: Empirical Approaches and Evidence," NBER Working Papers 19377, National Bureau of Economic Research, Inc.
  10. Ajay Agrawal & Devesh Kapur & John McHale, 2007. "Birds of a Feather - Better Together? Exploring the Optimal Spatial Distribution of Ethnic Inventors," NBER Working Papers 12823, National Bureau of Economic Research, Inc.
  11. William R. Kerr, 2008. "Ethnic Scientific Communities and International Technology Diffusion," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 518-537, August.
  12. C. Fritz Foley & William R. Kerr, 2011. "Ethnic Innovation and U.S. Multinational Firm Activity," NBER Working Papers 17336, National Bureau of Economic Research, Inc.
  13. Ajay K. Agrawal & Christian Catalini & Avi Goldfarb, 2011. "The Geography of Crowdfunding," NBER Working Papers 16820, National Bureau of Economic Research, Inc.
  14. Ajay Agrawal, 2014. "Diaspora Networks, Knowledge Flows and Brain Drain," WIPO Economic Research Working Papers 15, World Intellectual Property Organization - Economics and Statistics Division.
  15. Henley, John & Kratzsch, Stefan & Kulur, Mithat & Tandogan, Tamer, 2008. "Foreign Direct Investment from China, India and South Africa in Sub-Saharan Africa: A New or Old Phenomenon?," Working Paper Series RP2008/24, World Institute for Development Economic Research (UNU-WIDER).

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