"The Power of Local Networks: Returnee Entrepreneurs, School Ties, and Firm Performance"

• DOI: 10.5465/ambpp.2013.10740abstract
• Publication Date: 2015-04-06T20:57:51Z
• Authors: Elena Obukhova; Yanbo Wang; Jizhen Li
• Keywords: New Ventures; Disadvantaged; Equity

Returnees—nationals of a developing country who have studied or worked in developed economy and later returned to their home countries—appear ideally positioned start new ventures. Yet growing body research suggests that they perform no better—or even worse—than home-grown entrepreneurs, phenomenon we refer as “returnee liability.” While previous has sought the solution this puzzle institutional conditions returnees’ countries, key contribution paper is propose novel mechanism accounts for returnee liability; namely, lack social networks regions where To provide evidence mechanism, explore how entrepreneur’s her top management team’s local capital affects venture’s performance. Using unique, hand-coded dataset on Chinese high-technology firms, find ventures established by entrepreneurs with more school ties region are located less disadvantaged, relative those founded than returnees fewer there. We also can benefit from team members, but only if these members an equity stake venture. These findings expand our understanding important role creating