Diasporas and Domestic Entrepreneurs: Evidence from the Indian Software Industry

29 Pages Posted: 23 Jul 2007 Last revised: 15 Aug 2014

See all articles by Ramana Nanda

Ramana Nanda

Harvard University - Entrepreneurial Management Unit; National Bureau of Economic Research (NBER)

Tarun Khanna

Harvard University - Strategy Unit

Multiple version iconThere are 2 versions of this paper

Date Written: June 15, 2007

Abstract

This study explores the importance of cross-border social networks for entrepreneurship in developing countries by examining ties between the Indian expatriate community and local entrepreneurs in India's software industry. We find that entrepreneurs located outside software hubs - in cities where monitoring and information flow on prospective clients is harder - rely significantly more on diaspora networks for business leads and financing. Relying on these networks is also related to better firm performance, particularly for entrepreneurs located in weaker institutional environments. Our results provide micro-evidence consistent with a view that cross-border social networks serve an important role in helping entrepreneurs to circumvent the barriers arising from imperfect local institutions in developing countries.

Keywords: Diasporas, Informal Networks, Institutions, Entrepreneurship

JEL Classification: F22, L14, L26, L86, O17, O19

Suggested Citation

Nanda, Ramana and Khanna, Tarun, Diasporas and Domestic Entrepreneurs: Evidence from the Indian Software Industry (June 15, 2007). Available at SSRN: https://ssrn.com/abstract=1001709 or http://dx.doi.org/10.2139/ssrn.1001709

Ramana Nanda (Contact Author)

Harvard University - Entrepreneurial Management Unit ( email )

Boston, MA 02163
United States

HOME PAGE: http://www.people.hbs.edu/rnanda

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Tarun Khanna

Harvard University - Strategy Unit ( email )

Harvard Business School
Boston, MA 02163
United States
617-495-6038 (Phone)
617-495-0355 (Fax)

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