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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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