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Diasporas and Domestic Entrepreneurs: Evidence from the Indian Software Industry

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Author Info
Ramana Nanda () (Harvard Business School, Entrepreneurial Management Unit)
Tarun Khanna () (Harvard Business School, Strategy Unit)

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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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Publisher 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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Related research
Keywords: Diasporas; Informal Networks; Institutions; Entrepreneurship.;

Find related papers by JEL classification:
F22 - International Economics - - International Factor Movements and International Business - - - International Migration
L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
O19 - Economic Development, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. 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 Papers RP2008/24, World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  2. 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. [Downloadable!] (restricted)
  3. 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. [Downloadable!] (restricted)
  4. William R. Kerr, 2005. "Ethnic Scientific Communities and International Technology Diffusion," Harvard Business School Working Papers 06-022, Harvard Business School, revised Apr 2007. [Downloadable!]
    Other versions:
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