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Journal of International Business Policy

, Volume 2, Issue 4, pp 289–313 | Cite as

Diaspora engagement institutions and venture investment activity in developing countries

  • Michael E. CummingsEmail author
  • Alan Gamlen
Article
Part of the following topical collections:
  1. Migrants, Migration Policies, and IB Research

Abstract

In response to recent trends in migration and remittances, many home-country governments have created new agencies that we call diaspora engagement institutions (DEI) intended to address migrant issues. In developing countries, DEI policies often direct migrant money and attention to funding and founding new businesses back home. In this paper, we ask whether and when those DEIs are effective. Grounding our explanation in social exchange and social identity theories, we propose that DEIs are more effective when they promote a stronger sense of home-country belonging and reciprocal giving among migrants. Using evidence from panel data analysis of 35 countries observed from 2001 to 2010, we find partial support for our predictions.

Keywords

migration diaspora engagement international relations emerging markets panel data analysis social exchange theory 

Introduction

The funding, founding and growth of new businesses – entrepreneurship – are vital to economic growth, poverty reduction and broader social stability in developing countries. Countless studies have been carried out to explore how geographical location, institutional context, and other factors help entrepreneurial activity to drive economic growth (Boschma & Martin, 2010; Bowen & De Clercq, 2008). Although some scholars urge skepticism or caution (Parker, 2007), most agree that entrepreneurship and entrepreneurship policy play a key role in advancing the fortunes of developing countries in the global economy (Hasan & Tucci, 2010; Timmons & Bygrave, 1986).

Unfortunately, the countries most in need of economic development through entrepreneurship often lack the necessary access to capital, because institutional protections for investors are weaker (Guler & Guillén, 2010; Zacharakis, 1997). In the developed world, closing the finance gap traditionally involves angel investing and other forms of venture capital funding (Samila & Sorenson, 2011; Shane, 2012), including innovations such as crowdfunding (Belleflamme, Lambert, & Schwienbacher, 2014; Mollick, 2014). Yet, in the developing world, where regulatory institutions are weaker and capital is especially scarce, these first-world solutions are often unrealistic. Would-be entrepreneurs may instead rely more heavily on sometimes predatory microloans (Lewis, 2008; McIntosh & Wydick, 2005) or informal investments from family and friends (Bates, 1997; Bygrave & Reynolds, 2006; Kotha & George, 2012).

Recent work has begun to outline the economic role played by migrants, that is, people who live and work outside the country of their birth or nationality. The primary way migrants in the “diaspora”1 can contribute to filling the venture capital gap back home is through remittances, individual-to-individual or household-to-household transfers of from tens to a few thousands of US dollars each month (Martinez, Cummings, & Vaaler, 2015; Vaaler, 2011; Yang, 2011). Since the 1990s, remittances have emerged as an increasingly important source of foreign capital for economic growth, poverty reduction, and social development in poor countries (De Haas, 2005; Ratha, 2005, 2011; Woodruff & Zenteno, 2007).

Although individual remittance amounts tend to be very low, the aggregate amounts are vast. Remittances are now the second-largest international capital flow in the world, dwarfing overseas development aid and proving far more stable during crises than foreign direct investment. Global remittances reached US$689 billion in 2018 with more than $529 billion going to developing countries, where they are often one of the largest sectors of the entire economy (World Bank, 2019). Remittances are not just for financing household consumption of food, clothing, and housing, their uses also encompass household human capital investments in health and education (Adams & Cuecuecha, 2010; Edwards & Ureta, 2003). More importantly for this study, remittances drive the funding, founding and growth of new business ventures in developing countries: remittances enable entrepreneurship in contexts where it could never flourish otherwise (Hanusch & Vaaler, 2015; Ratha, 2005; Vaaler, 2011; Yang, 2011; Woodruff & Zenteno, 2007).

This trend turns much development orthodoxy on its head. Outward migration – emigration – has traditionally been thought of as a net loss for developing countries, who lose their best and brightest people via a “brain drain” (Bhagwati & Hamada, 1974; Carrington & Detragiache, 1998). However, the phenomenal growth of remittances as a share of economic activity is one reason why scholars and policymakers are increasingly enthusiastic about emigration as a net positive for developing countries (Collier, 2013; Kuznetsov, 2006). There is a catch: this enthusiasm depends on governments in migrants’ origin countries creating the right business and policy environment, so that migrants can easily share their knowledge, wealth, loyalty and attention back ‘home’ to enhance economic development, offsetting brain drain with “brain gain” (Gamlen, 2005, 2010a; Gamlen et al., 2017). In other words, the extraordinary enthusiasm of governments and international organizations about remittances today depends almost entirely on the belief that governments in migrants’ countries of origin will be able to effectively “engage the diaspora” via dedicated and effective outreach policies (Ionescu, 2006; De Haas, 2006; Agunias, 2009, 2013; Agunias and Newland, 2012).

In this article, we hold these stylized facts up to the light. Do such diaspora engagement policies actually work to amplify the positive impacts of remittances on entrepreneurship in developing countries? Broad-sample statistical evidence to support that view is rare (Leblang, 2015), despite calls from scholars in International Business (IB) (e.g., Vaaler, 2011) and migration studies (e.g., Délano & Gamlen, 2014). Most evidence comes in case studies suggesting that, for example, investment promotion agencies in these countries might (let’s hope) attract more diaspora capital and business activity (e.g., Riddle, Brinkerhoff, & Nielsen, 2008; Gamlen, 2012). These agencies are a type of organization we are calling a “diaspora engagement institution” (Gamlen et al., 2019). Because of the widespread enthusiasm for diaspora engagement policies, diaspora engagement institutions (DEIs) are rapidly proliferating, and are an ideal topic for an IB policy investigation, as they involve the two essential elements of (1) intent by policymakers, and (2) change-oriented institutions (Clegg, 2019). In this article, we provide the first broad-sample statistical evidence that we know of regarding whether and how DEIs actually do what they claim to. Do they in fact amplify the positive impact of remittances on venture activity in the home country? We provide the first available evidence we are aware of in answer to this question.

In our theoretical framework for this research, we generously assume that they do. We ground our assumptions in social identity and exchange theories: we can see how DEIs may prompt emigrants and their descendants in the diaspora to perceive a greater sense of belonging to their purported “homelands”. We see how DEIs may prompt migrants to trust their homelands, that is, to perceive a stronger reciprocal relationship between a country whose government addresses their transnational concerns and seeks, in turn, their support. This theoretical framework suggests clear hypotheses. It suggests the mere presence of a DEI, regardless of type, may magnify the positive impact of remittances on venture funding and founding rates back home. And it suggests that DEIs with more power at “home” or legitimacy in the diaspora may increase that magnification.

We test those predictions empirically through panel data analyses of 35 developing countries observed from 2001 to 2010. First, we confirm existing research (Vaaler, 2011) showing that remittances positively affect both new venture funding availability and founding rates. We then also confirm our optimistic hunch that DEIs significantly magnify the positive impact of remittances on new venture founding rates. This is our headline finding. However, we also find room for skepticism and caution: this effect does not apply to venture funding availability. Looking closer, we find that more powerful DEIs matter more: the positive effect is higher for national ministry or voting seats for migrants in the national legislature, and for DEIs within legislatures, where migrants may connect directly with elected representatives. We think that these and other findings support our theoretical framework and its broader proposition that, in certain circumstances, home-country DEIs amplify the venture-investment impact of remittances, which, in turn, contributes to economic growth and poverty alleviation in developing countries.

This study contributes in several ways to important research and public policy debates. For immediate purposes, we contribute to research in entrepreneurship by explaining how and why remittances prompt greater venture founding activity in the developing world. We show that it depends significantly on whether or not home-country officials and policies create institutions to give emigrants and their descendants a better sense of belonging and loyalty. That explanation adds to other IB research on remittance moderators that have, to date, noted the importance of diaspora structure (Vaaler, 2013) and home-country economic informality (Martinez et al., 2015).

We also contribute more broadly to IB research by asking when and how public agencies and policies affect the private transnational activities of firms and investors. Historically, that research asked after the impact of public agencies and policies on firm internationalization and foreign direct investment behavior by multinational enterprises (Lombard, 1978; Peng, Wang, & Jiang, 2008; Rugman & Verbeke, 1998). We add an entirely new dimension to this robust research tradition by adding migrants as a new type of venture investor and entrepreneur, while we add remittances as a new type of venture capital. And, crucially for this paper, we add DEIs as unheralded new public agencies, with the aim and the potential to attract both migrants and their money into desperately needed economic development, if only supported and enabled by friendly engagement from the authorities in the homeland.

The significance of this research seems likely to increase, as migration and remittances grow and sometimes even overtake multinational enterprises and foreign direct investment as the main economic influences on developing countries. For those new to these issues, it provides a rare dose of reliable data on international migration and related economic issues, at a time when such issues are politically confused. For experts, it addresses the persistent question in migration studies and migration policy-making about whether diaspora policies are effective or purely symbolic (Brinkerhoff, 2012; Gamlen et al., 2019; Agunias, 2013). As policymakers become more aware of which DEI configurations are more likely to enhance venture investment impact of remittances – by using our research as a guide – they will also become more adept at harnessing migrants and their substantial wealth and knowledge for economic development at home.

Theory and Background

We begin with an explanation of the major concepts underlying social exchange theory, which we use as one of our theoretical frameworks for this study. Social exchange theory stands for the proposition that unenforced reciprocity (termed “exchange activity”) is the basis for much of social interaction and human behavior (Homans, 1961). Although the theory was mostly developed to explain dyadic patterns of human interaction, it has also been utilized to explain broader network patterns of relationships and behaviors (Cook, 1977; Emerson, 1976). The key component is that, in a pattern of social exchange, resources are provided by one party with an unenforceable expectation of future reciprocation (Cropanzano & Mitchell, 2005; Muthusamy & White, 2005). For example, one study found that, when organizational members perceive that their organizations value and appreciate them, they reciprocate with behavior that benefits the organization (Tyler, 1999). Social exchange theory has been used across a variety of disciplines to explain patterns of human interaction in the workplace (Settoon, Bennett, & Liden, 1996), politics (Cann & Sidman, 2011), and the corporate boardroom (Westphal & Zajac, 1997).

It may be helpful here to distinguish between social exchange and economic exchange. Although there are some similarities, such as an actor’s implicit weighing of costs and benefits, there are some important differences. Unlike the negotiated, legally obligated, and contractually specified nature of most economic exchange, social exchange is comprised of voluntary action and entails unspecified future obligations that are rarely, if ever, negotiated in advance by the parties (Konovsky & Pugh, 1994). Also, the economic conception of wealth is narrower than the broader concept of resources contemplated in social exchange theory; from a social exchange perspective, the concept of resources contains a socio-emotional dimension as well as an economic one. A simplistic differentiation of these two resource types is that economic resources are tangible and address a party’s financial needs, while socio-emotional resources are symbolic and often address a party’s need for esteem, value, or dignity (Cropanzano & Mitchell, 2005; Song, Tsui, & Law, 2008). The reciprocation expectation inherent in social exchange differs from the legally enforceable principle of economic or contractual exchange: social exchange theory suggests that, in the absence of penalties for a legal breach of an agreement, parties to a relationship will participate in social exchange under circumstances only when the anticipated exchange benefits outweigh the costs (Cook, Molm, & Yamagishi, 1993). Without legal or financial compunction, any suboptimal agreement is a waste of time.

Cost–benefit analysis is not the only relevant framework to a social exchange participant: power and trust in an exchange relationship can also affect the likelihood of reciprocation (Fukuyama, 1999; Emerson, 1962; Homans, 1961). Power is an important factor in exchange relationships within and between organizations (Pfeffer, 1992), and one important dimension of power in these social exchanges is the extent to which one actor controls resources that are needed or valued by another (Wrong, 1980). Trust is similarly an important concept across disciplines: global businesses may depend on it to grow and adapt as they overcome the uncertainties and risks of operating across widely differing socio-legal jurisdictions (Fukuyama, 1999). Trust can arise out of perceptions (institution-based trust) or out of interactions (process-based trust) (Rousseau, Sitkin, Burt, & Camerer, 1998). In the DEI context, process-based trust is based on diaspora perceptions that state agencies are responsive in that they care about diaspora members and their needs. Institution-based trust, on the other hand, arises out of current or historical institutional actions that conform to diaspora expectations of what is right or appropriate (Thomas, 1998). A shift in either trust or power will change the nature of social exchange obligations arising out of DEI–diaspora relationships.

In addition to theories of social exchange, the use of social identity theory has a long history in organizational scholarship that seeks to describe multilevel phenomena and relationships: how individuals relate with and behave toward groups or organizations of which they are a member (Ashforth & Mael, 1989; He & Brown, 2013; Pratt, 1998). Identity and identification research has explained individual behavior within and toward organizations on topics such as cooperation and citizenship (Dutton, Dukerich, & Harquail, 1994), loyalty (Mael & Ashforth, 1992), and commitment (Whetten, Lewis, & Mischel, 1992). This broad research agenda has two main research streams, the first of which is organizational identity, which addresses the question of what is central, distinctive, and enduring about an organization (Albert & Whetten, 1985; Whetten, 2006). It focuses on organization-level attributes at a collective level and is the higher-level analog to individual conceptions of identity. The second main research stream, focusing on organizational identification, addresses the nature of the relationship between an individual and the organization (Dutton et al., 1994). Because it is a relational concept, it is measured at the dyadic level and, for each individual member, is manifest through an identity comparison which assesses the degree of overlap between identity concepts of a given individual and identity concepts of the organization. These identity comparisons occur when a group member assesses the fit between their self-identity and the observable identity-relevant characteristics of the organization (Foreman & Whetten, 2002). Essentially, the member asks herself the question: “Who am I in relation to the organization?” (Pratt, 1998). The answer to this question in thought to manifest in three related dimensions: solidarity with the organization, loyalty in attitude and behavior, and perception of shared characteristics with other group members (Ashforth & Mael, 1989; Patchen, 1970). The greater the degree of “fit” perceived by the group member, the higher the level of the member’s identification with the group or organization, and the more the group member is prone to feel solidarity and behave in group-benefiting ways.

Implicit in our use of this theory of organizational identification is the assumption that explaining employee loyalty in organizations is analogous to explaining diaspora loyalty towards a nation-state. This is by no means a long bow to draw either theoretically or empirically. Nation-states are routinely treated as organizations in the organizational science literature (Meyer, Boli, Thomas, & Ramirez, 1997). Moreover, diasporas are defined by consensus as populations that maintain a coherent, homeland-focused communal identity despite prolonged dispersion from it: these groups are defined by their orientation towards a homeland (Brubaker, 2005; Butler, 2001). Recent empirical research shows that the existence of DEIs is strongly associated with specific home-country conceptions of national membership (McIntyre and Gamlen, 2019).

The issue of diaspora engagement becomes slightly more complex when we consider that the communal identity of importance to the diaspora (often an ethno-religious group) may not match the corporate identity of the nation-state that occupies their homeland. Indeed, from the ancient period until the 1960s, the word diaspora was used almost exclusively to denote groups that were animated by – and in a sense existed mainly for the purpose of addressing – historical grievances such as expulsion from their homeland by hostile ethno-religious groups that still retained control over what emigrants and their descendants still regarded as their own state (Cohen, 2008; Dufoix, 2016). For example, the Kurds, the Tamils, the Palestinians, the Irish prior to the Good Friday Agreements, and numerous ethnic groups across Sub-Saharan Africa and mainland Asia have in recent decades had diaspora groups functioning as more or less militant oppositions in exile. The archetype of an exiled chosen people is one found in every place in every period of human history. Though the bar is higher for governments in such countries to successfully engage their diasporas, there is ample evidence that, in recent years, they have wholeheartedly tried to do so. It is the positive re-evaluation of diasporas by governments and international organizations in recent decades that has led in large part to the unprecedented recent rise of diaspora institutions in the first place (Gamlen, 2014, 2019; Gamlen et al., 2019).

The question of relevance for our study is, essentially, whether or not governments succeed in their diaspora engagement efforts. In particular, we are interested in how governments might use DEIs mitigate or reverse various kinds of business-deflating residual animosity between states and their exiles by treating their diasporas as heroes and model citizens, instead of denouncing them as “traitors” and “deserters” (Durand, 2004). And, more specifically, how might particular types of DEIs help to engineer a positive sense of shared identity and affinity between dispersed diasporas and the formal social, political, and economic institutions of the origin countries in ways that create enduring loyalties, which might in turn be leveraged into venture-friendly investment activity.

State Development Policy and Diaspora Engagement

A long history of literature in IB has addressed the impact and contingent effects of government involvement in economic matters. In large part, the literature has indicated that state action has the potential to positively affect economic development, such as the creation of new industries (Spencer, Murtha, & Lenway, 2005), although the direction and magnitude of this effect can depend on the state’s institutional context, the nature of its efforts, and the characteristics of the industry in question (Porter, 2000). Policies that are appropriately tailored can be effective, while those that are well-meaning but ill-fitting may “accomplish little beyond the expenditure of taxpayers’ money” (Spencer et al., 2005: 332–33).

In some contexts, over-regulation is certainly a concern (Lindblom, 1977), with some researchers concluding that “government matters most which governs least” (Spencer et al., 2005: 334). Direct governmental involvement can reduce the creative freedom of private firms and individuals (Mahmood & Rufin, 2005), prompt expropriation of private assets (Jensen, 2008), or give rise to corrupt practices by public officials (Mauro, 1995; North, 1990). Consequently, the most effective governmental economic programs may be those that generate appropriate incentives but let market actors work out the specifics. This is the approach that we take with regard to diaspora engagement. On a practical level, we argue that engagement efforts need not be explicitly focused on economic development; these institutions can also be effective in situations where they create meaningful incentives for diaspora members to participate in the development of the home-country economy.

Migration is a topic of increasing importance in international management research (Barnard & Pendock, 2013; Kotabe, Riddle, Sonderegger, & Täube, 2013; Riddle & Brinkerhoff, 2011; Sonderegger & Täube, 2010) and related areas such as economics (Arango & Baldwin-Edwards, 2014; Hollifield, Martin, & Orrenius, 2014), and public administration (Andrews, Boyne, O’Toole, Meier, & Walker, 2013; Yanow, 2015). However, the study of institutions and policies in such research largely focuses more on immigration policies in migrants’ country of residence than emigration policies created by their home country. Although such an imbalance is understandable, given the relative rarity of such emigration policies historically, recent shifts in official home-country attitudes toward emigrants and their descendants in the diaspora merits a reconsideration of research focus. DIEs existed in just a handful of governments in 1980, but by 2015 they were present in well over half of all United Nations Member States (Gamlen, 2014, 2019; Gamlen et al., 2019). These institutions typically cast diasporas not as traitorous deserters but rather as national heroes, to be feted in special holidays or events (Durand, 2004; Shain & Barth, 2003), and to be targeted by campaigns to stimulate financial remittances, investments or investment promotion, donations, and ‘roots tourism’ (Brinkerhoff, 2012; Leblang, 2010; Terrazas, 2010).

One example of innovative diaspora engagement is Israel’s Birthright program, which since 1999 has brought over half a million Jewish youth from across the world to Israel for educational programs designed to strengthen their cultural and national identities as members of the diaspora (Birthright Israel, 2015). The model has recently been expanded with the formation of the Jewish Women’s Renaissance Project, which runs its program in formal partnership with the Israeli Ministry of Diaspora Affairs and brings mothers to Israel for a similar cultural education (Amouyal, 2014; Jewish Women’s Renaissance Project, 2015; Kashti, 2015). A range of other countries run comparable programs, both to capture tourist dollars and also to reheat long dormant loyalties to home amongst co-ethnics settled abroad. Examples have included roots tourism campaigns in Ghana and Sierra Leone based around those countries’ history of slavery, and targeting the distant descendants of slaves in the diaspora in order to attract foreign capital (Benton & Shabazz, 2009). Similarly, Morocco’s Tourism Ministry ran Opération Merhaba in the mid-2000s in order to reduce official corruption and exploitation of Moroccans visiting ‘home’ (de Haas, 2007). Meanwhile, as a result of recommendations at the Global Irish Economic Forum in Dublin in 2009, Ireland’s National Tourism Development Authority launched a government scheme called ‘The Gathering’ in 2013, which supported locally organized events and activities (such as sporting and cultural fixtures and family reunions), aimed at increasing diaspora tourists (Miley, 2013).

Another approach to diaspora engagement is to utilize diaspora members as an overseas economic lobby. Research has shown that diaspora members influence foreign direct investment flows (Leblang, 2010), and some countries are attempting to use this influence to stimulate economic growth. An example of this is ConnectIreland, a private organization with government support whose program uses job-creation tax incentives to provide financial motivation for diaspora members (and others who refer foreign companies to Ireland) as a base for international expansion (ConnectIreland, 2015). Both Australia and New Zealand have established similar structures: Advance is a government-sponsored Australian business network that brands itself as a “community of global Australians who are able to make a difference for Australians, Australian companies and Australia around the globe” (Advance, 2017). Meanwhile, Kea New Zealand is a public–private partnership co-founded by Kiwi expatriate business academic, David Teece, as the Kiwi Expatriate Association in the early 2000s, which now brands itself as ‘New Zealand’s borderless nation’ and dedicates itself to “connecting Kiwis with Kiwis – creating high impact global connections for the benefit of New Zealand and our people, no matter where they are” (Kea New Zealand, 2017). Indeed, economic lobbying is one of the main justifications that most of the world’s DEIs give for their existence. For example, Albania’s Department for Consular Affairs and Diaspora aims to attract investments from the Albanian diaspora (Ndrenika, 2013); its predecessor, the National Diaspora Institute, aimed to facilitate diaspora entrepreneurship/investment opportunities for the Albanian diaspora (Gashi, 2009). Armenia’s Diaspora Ministry aims to coordinate diaspora investment initiatives and partnerships in order to harness the economic development contribution of the Armenian diaspora (Ministry of Diaspora, 2013). Azerbaijan’s Committee for State Work with the Diaspora aims to actively encourage investment to facilitate entrepreneurial activity (Azerbaijan, 2013). DEIs in Barbados, Bangladesh, and Bosnia Herzegovina explicitly aim to facilitate diaspora investment, while Brazil’s Under Secretary General for Brazilian Communities Abroad aims to coordinate diaspora entrepreneurship and philanthropic initiatives. Cape Verde’s Ministry of Communities explicitly links the two objectives of developing strong incentives to facilitate diaspora investment and maintaining strong diaspora ties with the descendants of emigrants (International Organization for Migration, 2015). And so on goes the list, right down to Zambia’s Diaspora Liaison Office, which aims to facilitate and engage diaspora investments and other development projects among Zambians in the diaspora (Diaspora Liaison Office, 2011). Even the Zimbabwean government, not known for its harmonious relations with the Zimbabwean diaspora, has a Diaspora Unit within its Ministry of Macro-Economic Planning and Investment Promotion, which aims to develop diaspora target packages to attract remittances (Madera, 2016).

In addition to participating in cultural trips and acting as investment consultants, diaspora members can act as investors themselves. Diaspora bonds are one avenue through which developing countries can attract additional revenue: by lending money to the home country at below-market rates, diaspora members can prop up a struggling economy and help it to weather financial storms (Ketkar & Ratha, 2010). Such bonds give diaspora investors a “warm glow” of knowing that they are benefiting the homeland, and may also increase their sense of ownership and voice in political and economic affairs. The two most prominent examples of successful diaspora bonds have been India and Israel, although other countries, such as Ethiopia, Egypt, and Ghana, have also marketed bonds to diaspora members (Chander, 2001; Ketkar & Ratha, 2010). Moreover, there are numerous tales of diaspora direct investment circulating amongst diaspora policy-makers in DEIs around the world: Irish officials, for example, often point to the role of Irish diaspora executives in the decision of computer chipmaker, Intel, to locate there. During the height of the Celtic Tiger economic boom, Irish Development Agency (IDA) CEO, Sean Dorgan, related: “One of the key issues for Intel was the availability of electronic engineers, so part of what IDA did was commission some work that identified 200 Irish electronic engineers who were spread round the world in places like Silicon Valley, or Massachusetts, or with Philips in Eindhoven or Siemens in Munich…. They were asked the question if a suitable opportunity arose would you move back to Ireland? And there was an overwhelming answer yes, which was actually essential raw material to satisfy the Intel due diligence on investing in Ireland” (Dorgan, 2007).

Whatever the means of diaspora engagement, it represents, for the most part, a dramatic about-face in state–diaspora attitudes and practices. This shift has been accompanied and facilitated in part by the formation of DEIs, which we define as formal offices in the executive or legislative branches of government, whose focus is solely or primarily diaspora-related issues (Gamlen, 2014). This restrictive definition excludes legitimate and possibly effective diaspora-related efforts by subnational government entities (Bilgili & Agimi, 2015), neighborhood associations (Orozco & Lapointe, 2004), country-specific NGOs (Fagen et al., 2009), public–private partnerships (ConnectIreland, 2015), or supranational or regional diaspora-centered NGOs (Kibaki, 2003). Such a conservative definition allows us to generate a valid and reliable empirical measure for this study (see below), but we do not intend in any way to suggest that other forms of diaspora organizations or diaspora engagement are not important. Quite the contrary: many DEIs would be unable to operate as effectively without a network of other partner organizations in the nonprofit or private sector.

One example of such cooperation involves is the International Diaspora Engagement Alliance, a US State Department and USAID-sponsored public–private partnership which holds an annual Global Diaspora Week consisting of parallel events across a number of countries (IDEA, 2015). A DEI can piggyback on such an effort to tailor engagement initiatives and magnify its outreach message. Another example is annual events that are sponsored by country-specific nonprofit diaspora groups, such as the National Association of Haitian Professionals (NAHP, 2015), whose annual conference has featured, among others, the Acting Prime Minister of Haiti and the head of the Ministry of Haitians Living Abroad, Haiti’s formal, executive-level DEI.

Despite the fact that our restrictive definition leaves out some of these important diaspora engagement players, this more restrictive approach is necessary for a large, cross-national study. First, there are significant differences in observability, longevity, focus, and formalization between national-level DEIs and local-level DEIs or diaspora-focused NGOs. Our approach ensures that the organizations under study are more or less comparable across countries. Secondly, other types of diaspora organizations (NGOs and quasi-governmental agencies) include market actors themselves, and their inclusion in our sample would be endogenous to the venture investment activity we are trying to predict. Even among this more restrictive set of DEIs, there is fascinating variation in implementation: in the executive branch of government there are both ministerial-level DEIs (Serbia’s Ministry of Religion and Diaspora or Somalia’s Ministry for Diaspora and Investment) and diaspora-focused administrative departments (Albania’s National Diaspora Institute and Ethiopia’s Diaspora Coordinating Office). On the legislative side, some states address the diaspora issue through dedicated diaspora representation in the legislative body (Colombia, Ecuador, France), through the use of standing committees (Nigeria’s House Committee on Diaspora Affairs), or through formal advisory councils (the Hungarian Diaspora Council). This variation in DEI implementation gives rise to the empirical predictions in Hypotheses 3 and 4 (see next section)

Hypothesis Development

We now move from an outline of the underlying theory and discussion of the phenomenon to our theoretical predictions. The emerging development refrain is that migration and remittances can be leveraged for financing new ventures (Brinkerhoff, 2011; World Bank, 2015a). Although prior research (Dustmann & Kirchkamp, 2002; Martinez et al., 2015; Vaaler, 2011; Woodruff & Zenteno, 2007) has outlined the theoretical underpinnings for why and how remittances have a measurable impact on venture activity in developing countries, we outline the underlying logic for this prediction to set the stage for subsequent contingent predictions.

Migrant diasporas certainly participate in traditional forms of international capital investment [such as foreign direct investment (FDI) and portfolio investments], but much or perhaps most migrant investment occurs via personal remittances, which are private transfers of money between individuals or households in different countries. They are usually sent as gifts or as payments for goods or services, most often from countries of residence to countries of origin. They are also a major source of informal investment capital. Migrant remittances are often small, less than $500 in a given transaction, but the transactions are frequent – perhaps monthly or quarterly – and are less sensitive than other international financial flows to the effects of economic growth or decline.

As of 2017, the number of migrants had increased to 258 million, making migrants the fifth largest “country” in the world (UNDESA, 2017). The remittances of these migrants now exceed $689 billion, with a staggering flow of $529 billion going to developing countries (World Bank, 2019). Migrant remittances to developing countries are either the number one or two (to FDI) international capital flow. They dwarf international lending, portfolio investment, and government-to-government aid. Recent scholarship on the role of migrant diaspora in economic development (e.g., Vaaler, 2011) has provided evidence that remittances serve more than just subsistence (e.g., food and clothing) needs in developing countries. Vaaler (2011) finds that remittances to these countries positively and substantially affect indicators of capital availability and entrepreneurial activity. In other words, migrants who send money home from abroad can be a substantial driving force for economic development (Adams Jr. & Page, 2005) and help developing country entrepreneurs overcome their endemic capital constraints (Mohapatra & Ratha, 2011).

Remittance value for venturing purposes arises because, relative to non-migrant foreign venture investors, migrant diaspora members are able to overcome the higher transaction costs of investing in an environment that otherwise lacks the requisite institutional framework to protect their capital. This ability to overcome or counteract opportunistic behavior is facilitated by the relationships that migrants have with remittance recipients, typically community and family members who share a set of beliefs and values and who trust each other (Ouchi, 1980; Ratha, 2011). Remitting migrant entrepreneurs can utilize these relationships as informal substitutes for relatively weak formal institutional guarantees that come with funding new ventures in developing economies. This is particularly relevant for small businesses or micro-enterprises that receive small but frequent capital transfers. Even if only a small percentage of remittance funding goes for business rather than household consumption, the cumulative effect of these transfers will significantly and positively affect the new venture environment in the home country (Vaaler, 2011). Therefore,

Hypothesis 1:

Remittances are positively associated with home-country venture investment activity.

Based on the preceding general discussion of social exchange and organizational identification theories, we now move to an exploration of how these theories apply in the DEI–diaspora context. The received wisdom is that in order for diaspora members to engage in transformational activities vis a vis the home country, they must have the motivation to do so and the ability to overcome local institutional constraints (Agunias & Newland, 2012). Our basic premise is that most states establishing DEIs seek to provide a combination of both economic and socio-emotional resources in expectation of receiving sought-after political support and economic resources from their diaspora. DEIs may provide these two types of resources in a wide variety of ways, including the organization of diaspora investment conferences, facilitation of migrant dual citizenship, a greater sense of belonging, and provision of a vote and a voice in national (and even sub-national) politics back home (Gamlen, 2014; Gamlen et al., 2019). We argue that the provision of these resources both lowers the transaction costs of remitting and creates a social exchange obligation in the diaspora.

For a given country, the baseline level and investment/noninvestment makeup of remittances depends on a variety of economic factors and social relationships (de Haas & Plug, 2006). Establishment of a DEI has the potential to affect remittances by creating additional social exchange incentives. The DEI can do this by publicizing and promoting the idea that, when overseas migrants remit or otherwise encourage investment, not only are they helping their immediate friends and family but the multiplier effect of the influx of foreign capital also creates positive spillovers for the nation’s broader economy. DEIs likely also increase the migrant’s sense of belonging, strengthening diasporans’ identification with the home country. They can do this through direct diplomacy, or by sponsoring or participating in cultural events. For example, the Armenian Minister of Diaspora Affairs’ website touts such diverse activities as meetings with ambassadors and diaspora-focused NGOs, as well as its sponsorship of a concert in Toronto featuring an Armenian songwriter (Ministry of Diaspora, 2015). Such outreach efforts strengthen diaspora members’ transnational identity which increases loyalty to the home country and subsequently induces positive emotions and behaviors. This can then give rise to a virtuous cycle, in which both the exchange-based reciprocity norms and the identity-based loyalty norms lead to increased diaspora commitment to the home country’s political and economic success.

DEIs engage in a wide variety of activities directed toward creating, fostering, and benefiting from relationships with their diaspora. Examples include outreach (e.g., conferences and conventions), political inclusion (e.g., overseas voting and representation in home-country legislatures), civil rights promotion (e.g., timely payment of welfare and social security benefits to migrants in CORs), and economic development (e.g., subsidies to investing migrants) (Gamlen, 2006, 2015). Such activity by DEIs represents, in social exchange terms, a provision of resources that may give rise to reciprocal behavior from the diaspora. In social identity terms, it may increase the diaspora members’ sense of identification with the diaspora and the home country, increasing loyal attitudes and behaviors. One way for migrants to reciprocate or show loyalty is to spread positive information about institutional characteristics and investment opportunities in the home country. Such a role is not unheard of as prior empirical work has explored the ways in which migrants and expatriates have been found to influence international flows of FDI and foreign aid (Alesina & Dollar, 2000; Hernandez, 2014; Leblang, 2010, 2015), as well as bilateral trade (Gould, 1994) between countries of origin and countries of residence. They can do this by sharing specialized knowledge and utilizing social networks and other relationships in both home- and host-countries. This hypothesized mechanism is that diasporans act as knowledge brokers to less-knowledgeable non-migrant investors. The specialized knowledge helps the non-migrant investor navigate the intricacies of a new institutional climate, lowering the transaction costs of the foreign investment.

By investing money and sharing knowledge of home-country investment opportunities, diasporans can respond to the perceived social exchange obligation or renewed identification with the home country. Migrants typically send money home via financial remittances for a wide variety of purposes, including healthcare, housing, and investment. We predict that, as DEIs engage in reciprocity and loyalty-inducing behaviors, migrants will reciprocate by increasing the flow of investment relative to other remittance uses, resulting in a greater percentage of remittance dollars that will be allocated toward productive investments. Therefore,

Hypothesis 2a:

DEIs are positively associated with home-country venture investment activity.

Hypothesis 2b:

DEIs magnify the venture-investment impact of remittances.

The prior hypotheses regarding DEI impacts (Hypotheses 2a and 2b) did not consider the variety of ways in which diaspora engagement is carried out (Agunias & Newland, 2012), and it is likely that the heterogeneity in the methods and configuration of DEIs has meaningful implications for diaspora social exchange and social identification. For example, a DEI may be organized as a full dedicated ministry, or it may address diaspora affairs as part of a broader policy agenda that also encompasses immigration and foreign affairs. These different autonomy levels (standalone versus portfolio approach) have significant implications for the way a DEI approaches its diaspora relationship. Countries may also have more than one DEI working in parallel, which may similarly influence the nature and extent of the state’s relationship with the diaspora. This next set of hypotheses outlines several DEI dimensions (including DEI configuration) that we predict are relevant to how diasporans will respond to the influence of DEIs.

One meaningful way in which DEIs may differ quite drastically is in their level of focus on the diaspora. For example, DEIs can range in importance from an office housed within a wider governmental ministry (e.g., the Irish Abroad Unit established in 2006 and housed within the consular division of Ireland’s Department of Foreign Affairs) to a fully autonomous ministry dedicated to the diaspora (e.g., the Ministry of Overseas Indian Affairs which existed between 2004 and 2016) (Gamlen et al., 2017). The degree to which DEIs are prominent in the bureaucracy and focused on the diaspora impacts the DEI-diaspora exchange in at least two ways. First, there is a practical difference in the level of political and administrative autonomy among these organizations. A standalone organization may signify a greater commitment by the state to diaspora affairs, and will have relatively greater freedom to set policy agendas, allocate resources and adjust to shifting diaspora needs. This autonomy allows the standalone DEI to be more effective at accomplishing the goal of providing resources to the diaspora, increasing exchange reciprocation and loyalty. This is particularly important for venture capital investment because it requires a supportive institutional environment in order to make investors feel more comfortable initiating investments in high-risk activities.

The second way in which a greater degree of focus matters to migrant perceptions is that a more autonomous DEI is most likely going to be perceived by migrant investors as a greater commitment by the state to the diaspora cause, even given the same level of organizational effectiveness. From a social identity perspective, a higher-profile DEI means that diaspora issues are more identity-related (i.e., central and enduring), and confer greater recognition and honor on the diaspora, in turn increasing diasporan identification with the state; put differently, if the state is focused on issues strongly relevant to diasporans, it increases the congruence between state and diaspora perceptions of co-identity, and consequently tips the balance in favor of greater loyalty. Such an emotional appeal may be particularly important because of the propensity of investors in information-poor contexts to supplement uncertain investment calculations with ‘gut instincts’ and other less-than-rational sixth senses about what ventures ‘have legs’. In the uncertain investment environments that characterize many developing countries, the motivations for investment may be deeply bound up with the investor’s own emotional perceptions and personal connections to the opportunity, including their senses of trust, of belonging, and of being valued and honored.

We predict that, for DEIs with a more prominent place in the hierarchy of governmental entities, this combination of greater organizational effectiveness and policy coherence, combined with perceptions of a strong level of commitment or dedication to the diaspora, will increase the diaspora level of trust in the state, as well as the power held by the state in its diaspora relations. All else equal, this increase in both trust and power will increase diaspora exchange obligations, leading to an increase in reciprocation behaviors. Therefore,

Hypothesis 3a:

DEI prominence in the state bureaucracy is positively associated with home-country venture investment activity.

Hypothesis 3b:

Highly prominent DEIs magnify the venture-investment impact of remittances more than less prominent DEIs.

Another way in which DEIs differ is their location in the executive or legislative branch of government. There are tradeoffs between the two approaches in terms of the resources they provide. A legislative DEI may give the diaspora a vote and/or a direct voice in a law-making body, which is salient for the social exchange and organizational identification perspectives on diaspora–home country relationships. This voice, and the sense of efficacy that may result, can represent a substantial socio-emotional resource, encouraging reciprocal behaviors that we predict may include investment promotion or direct investment in the home country. On the other hand, an executive DEI, while it may have a closer relationship with executive policy-makers, is typically led by unelected officials. We predict it may therefore lack the same symbolic representativeness, and possibly decrease the positive effect of DEIs on venture investment activity. Therefore,

Hypothesis 4a:

Legislative DEIs are more positively associated with venture investment activity than are DEIs housed in the executive branch of government.

Hypothesis 4b:

Legislative DEIs magnify the venture-investment impact of remittances in more than executive DEIs.

Empirical Model and Analytical Strategy

To investigate empirical support for this study’s basic predictions regarding the impacts of diaspora engagement efforts on migrant investor behaviors, we define the following statistical model for estimation (Equation 1):
$$VentureActivity_{it} = \alpha + \mathop \sum \limits_{s = 1}^{s = n} \lambda_{s} Controls_{it - 1} + \beta_{1} Remit_{it - 1} + \beta_{2} DEI_{it - 1} + \beta_{3} Remit*DEI_{it - 1} + \mathop \sum \limits_{j = 1}^{j = n} \gamma_{j} Countries_{I} + \mathop \sum \limits_{x = 2001}^{x = 2010} \psi Years_{t} + \varepsilon_{it}$$
(1)
where VentureActivity refers to either (1) VentureFunding, a cross-country longitudinal measure of the availability of venture capital in a given country, based on the Global Competitiveness Index’s “risky but innovative funding” measure (Schwab, 2013), or (2) VentureFounding, a cross-country longitudinal measure of new business registrations (World Bank, 2015b); Controls refers to appropriate economic, political, and institutional characteristics of the home country, as well as demographic characteristics of its migrant diaspora; Remit refers to the economic contributions of a country’s migrant diaspora via total remittances as a percentage of GDP; and DEI is a 0/1 measure that indicates whether the country had an operating DEI in a given year.

Based on Equation 1, we will regress Venture Activity in country I of year t on an intercept (\(\alpha\)) and then several terms representing domestic country factors thought to influence new venture activity (Controls). We will also regress Venture Activity on two right-hand side terms (β1–2) which facilitate initial tests of our first two hypotheses. Consistent with Hypothesis 1, we expect Remit to enter with a positive sign (β1 > 0). Consistent with Hypothesis 2a, we also expect DEI to enter with a positive sign (β2 > 0). Hypothesis 2b predicting that DEI’s effects are experienced indirectly through migrant investment activity will be supported if the sign on Remit*DEI is significantly positive (β3 > 0). To round out the explanation of Venture Activity, we also regress it on individual country I (γ1−n) and year t (ψ2001–2010) 0–1 dummies to capture unspecified but idiosyncratic country- and time-specific effects. The error term (ε) picks up other unspecified effects varying by country I and year t. Each subsequent hypothesis and robustness test builds upon this basic empirical model by introducing new terms and adding additional interaction terms.

Data and Methods

Reliable data on international migration are surprisingly scarce (Gamlen, 2010b), and part of our contribution is to compile and combine substantive new data collected through primary research. To test these hypotheses, we gather and analyze a dataset of political, institutional, and economic data in developing and emerging countries. Although the majority of UN countries have DEIs, we restrict the sample to countries classified by the World Bank as developing or emerging (low, lower-middle, and upper-middle income), consistent with prior research on the impact of remittances for entrepreneurial outcomes (Martinez et al., 2015; Vaaler, 2011), which reflects an assumption that the potential influence of migrant investors and DEIs via remittances is most pronounced for countries with lower income levels. We then eliminate from the analysis all countries that are missing data for key independent and control variables. This results in a sample size of 213 observations in 35 countries,2 which collectively have over 70 million migrants: more than 25% of the worldwide population of migrants living outside their home countries. Our sample countries, DEI status, and average venture financing values are listed in Appendix A. As described above, in all estimations, we lag independent and control variables to ensure temporal precedence and strengthen causal inference.

We estimate Equation 1 using Stata 13. Analysis of the relationship between Remittances, DEIs, and VentureFunding relies on a panel-feasible generalized least squares estimator (“xtgls” in Stata) with panel-specific first-order autoregressive processes which reduce the concern associated with serial correlation. We rely on a panel negative binomial regression estimator to estimate the effects of Remittances and DEIs for the VentureFounding models (Stata’s xtnbreg command).3 Such a panel estimator provides the flexibility to address unobserved heterogeneity, such as the possibility that countries may differ on other unmeasured characteristics not included in the model (Hausman, Hall, & Griliches, 1984). All models include country fixed effects and year dummies.

Variable Data Sources

Data for VentureFunding comes from the World Economic Forum’s Executive Opinion Survey (EOS) which comprises part of the Global Competitiveness Index (Schwab, 2013) and consists of a perceptual measure of the availability of venture capital for “risky but innovative projects”. The EOS is important for both practice and research. It is used by prominent scholars in their study of finance, development and public policy (La Porta & Shleifer, 2008), as well as entrepreneurship (Stenholm, Acs, & Wuebker, 2013). It is included in important cross-country indices related to corruption (e.g., Transparency International’s Corruption Perceptions Index) and bribery (e.g., International Bribe Payers Index). Multilateral institutions like the World Bank use it to gauge the progress of developing countries, and national government agencies and ministries tout their ranking and changes-in-ranking in discussions with such institutions as well as potential foreign investors (Gamlen et al., 2019).

Data for VentureFounding comes from the WDI’s World Bank Group Entrepreneurship Survey and reflect the number of new (LLC) business registrations in each country in each year (World Bank, 2015b). The favorable aspect of this dataset is that its focus on official business registrations makes it more or less comparable across countries. However, this comparability comes at a cost. Focus on formal registrations likely undercounts smaller unregistered micro-enterprises so prevalent in less-developed countries and reduces the likelihood of finding an effect in our empirical setting, making this a somewhat conservative test of the foregoing hypotheses.

Data for Remittances comes from the World Bank’s Development Prospects Database and the IMF’s Balance of Payments Statistics Yearbook. These data are available through the World Development Indicators (WDI), which relies on annual country estimates of the three total remittance components: workers’ remittances, compensation of employees and migrants’ transfers, and is calculated in US dollars. This total is divided by country GDP to create a percentage measure of remittances’ relative contribution to the home-country economy.

Data for the DEI variables comes from a comprehensive dataset on diaspora engagement that has been compiled through a combination of archival and interview research by associates at the Diaspora Engagement Policies Project, part of the broader Oxford Diasporas Programme (Gamlen et al., 2019; Gamlen, 2014, 2019). The primary (moderating) independent variable, DEI, is a binary measure that indicates whether the country has any formal DEI in a given year. The same dataset also provides information regarding the bureaucratic location (DEILegislative and DEIExecutive) and status (DEIHighStatus) of DEIs.

Our control measures come primarily from the sources listed above, such as the WDI and GBMD (World Bank, 2012, 2015b). These include indicators measuring various components of the institutional (Rule of Law, Government Share of Economy), macroeconomic (GDP, Economic Growth, Wealth, Inflation, Economic Openness), diaspora (Diaspora Size) and foreign capital (Foreign Aid, Portfolio Investment, Foreign Direct Investment) environments of our 35 countries.

Results

Descriptive Statistics and Correlations

The descriptive statistics (Table 1) reveal several items of interest. First, note the positive but relatively weak correlation (0.07) between new business starts and the availability of venture capital funding. This suggests that the two measures, though somewhat correlated, may be capturing different aspects of the health of the entrepreneurial ecosystem, and suggests the possibility of different findings for the two dependent measures. Also, based on the pairwise correlations in Table 1, most control variables seem to show the predicted signs. For example, Wealth, Economic Growth, and GDP are all positively associated with our dependent measures, suggesting their consistency and validity as measures of economic well-being. FDI is positively correlated with both measures of VentureFunding, though not with VentureFounding, suggesting that if there is a spillover impact of foreign investment by multinationals, its most primary impact may be in terms of capital availability and scaling, rather than increasing the number of registered businesses.
Table 1

Pairwise correlations and descriptive statistics

 

Variables

Mean

S.D.

1

2

3

4

5

6

7

8

9

10

11

12

13

14

1

Founding

27,609.15

66,411.84

1.00

             

2

Funding

2.92

0.58

0.07

1.00

            

3

GDP

24.44

1.71

0.48

0.08

1.00

           

4

Econ.Growth

5.01

4.00

0.01

0.24

− 0.05

1.00

          

5

Wealth

3161.26

2416.69

0.22

0.08

0.36

− 0.13

1.00

         

6

Inflation

0.07

0.05

0.15

− 0.11

0.13

− 0.03

− 0.02

1.00

        

7

Rule of Law

− 0.35

0.49

− 0.06

0.48

− 0.09

0.07

0.38

− 0.11

1.00

       

8

Govt_Econ

13.82

4.82

0.19

0.24

− 0.12

− 0.14

0.33

− 0.03

0.52

1.00

      

9

Economic Open

76.62

33.60

− 0.29

0.28

− 0.63

0.07

− 0.07

− 0.09

0.22

0.26

1.00

     

10

Diaspora Size

13.20

1.38

0.29

− 0.13

0.67

− 0.06

− 0.06

0.09

− 0.49

− 0.38

− 0.42

1.00

    

11

Foreign Aid

0.02

0.03

− 0.25

− 0.37

− 0.56

0.09

− 0.47

− 0.04

− 0.13

− 0.09

0.17

− 0.34

1.00

   

12

Portfolio Invest

1.12

5.21

0.24

0.09

0.39

0.06

0.17

− 0.06

0.09

0.09

− 0.29

0.14

− 0.14

1.00

  

13

FDI

0.04

0.04

− 0.10

0.12

− 0.28

0.12

0.15

0.07

0.27

0.27

0.47

− 0.37

0.03

− 0.11

1.00

 

14

Remittances

0.06

0.07

− 0.28

− 0.20

− 0.41

− 0.05

− 0.38

− 0.03

− 0.12

− 0.08

0.32

− 0.03

0.24

− 0.15

0.18

1.00

15

DEI

0.59

0.49

− 0.14

0.04

0.42

− 0.04

− 0.04

− 0.04

− 0.15

− 0.28

− 0.35

0.50

− 0.20

0.11

− 0.37

− 0.12

On the other hand, there is a negative relationship between Remittances and both dependent measures, indicating that the positive relationship between Remittances and the venture investment environment in developing countries, if any, is more complicated than a bivariate correlation would indicate. Those countries with the highest remittances as a percentage of GDP – in our sample, Jordan and Moldova, with over 20% of their economy coming from remittances – suffer from low levels of institutional and economic development. In a certain sense, it is unsurprising that remittances are highest at lower levels of economic development, that is, where the need for outside capital from migrants abroad is greatest. It is important to point out, however, that our primary interest is not the bivariate relationships between our variables of interest, it is the within-country effect of increasing remittances, given a particular institutional setting and level of economic development. For that, panel regression methods are most appropriate.

Multiple Regression Results

The results from multiple regression analyses related to Hypotheses 1 and 2 are presented in Tables 2 and 3. Table 2 presents results from regression analyses of venture activity and remittances with two alternative dependent variables: VentureFounding, and VentureFunding. These analyses permit a test of our baseline Hypothesis 1, which predicted that, consistent with prior literature (Brown, 2006; Martinez et al., 2015; Vaaler, 2011; Woodruff & Zenteno, 2007), remittances would have a significant positive impact on home-country venture activity in the form of new venture funding and founding.
Table 2

Regression analyses, DEI effects on venture activity (Hypotheses 1, 2a and 2b)

Variables

(1)

(2)

(3)

(4)

(5)

(6)

Founding

Founding

Founding

Fund_VC

Fund_VC

Fund_VC

XTNBREG

XTNBREG

XTNBREG

XTGLS

XTGLS

XTGLS

GDP

− 0.25*

− 0.24*

− 0.23*

0.38**

0.38**

0.37**

(0.12)

(0.12)

(0.12)

(0.13)

(0.13)

(0.13)

Economic Growth

0.02

0.02

0.02

0.02*

0.02*

0.02*

(0.01)

(0.01)

(0.01)

(0.01)

(0.01)

(0.01)

Wealth

0.00

0.00

0.00

− 0.00+

− 0.00+

− 0.00

(0.00)

(0.00)

(0.00)

(0.00)

(0.00)

(0.00)

Inflation

2.98**

2.87**

3.20**

0.37

0.37

0.39

(0.88)

(0.88)

(0.91)

(0.50)

(0.50)

(0.50)

Rule of Law

0.46**

0.47**

0.46**

0.15

0.15

0.14

(0.17)

(0.18)

(0.18)

(0.13)

(0.13)

(0.13)

Govt Share of Economy

0.00

0.00

0.01

0.01

0.01

0.01

(0.02)

(0.02)

(0.02)

(0.01)

(0.01)

(0.01)

Economic Openness

− 0.00*

− 0.01*

− 0.01**

− 0.00*

− 0.00*

− 0.00*

(0.00)

(0.00)

(0.00)

(0.00)

(0.00)

(0.00)

Diaspora Size

0.47**

0.51**

0.53**

0.32**

0.33**

0.33**

(0.17)

(0.17)

(0.17)

(0.09)

(0.09)

(0.09)

Foreign Aid

1.82

1.53

1.45

− 1.45

− 1.49

− 1.56

(1.96)

(2.01)

(2.01)

(1.34)

(1.34)

(1.34)

Portfolio Investment

0.00

0.00

0.00

0.00

0.00

0.00

(0.01)

(0.01)

(0.01)

(0.00)

(0.00)

(0.00)

Foreign Direct Investment

0.98

0.88

1.05

0.40

0.41

0.39

(1.11)

(1.12)

(1.13)

(0.65)

(0.65)

(0.65)

Remittances

3.29**

3.29**

3.15*

2.99*

3.02*

2.78+

(1.24)

(1.22)

(1.25)

(1.37)

(1.38)

(1.46)

DEI

 

− 0.16

− 0.40*

 

− 0.01

− 0.05

 

(0.10)

(0.16)

 

(0.07)

(0.10)

Remittances × DEI

  

2.68*

  

0.49

  

(1.35)

  

(0.95)

Constant

1.92

1.32

0.80

− 11.35**

− 11.34**

− 11.21**

(1.77)

(1.80)

(1.78)

(3.71)

(3.70)

(3.71)

n (Country n)

213

213

213

192

192

192

(35)

(35)

(35)

(33)

(33)

(33)

This table presents point estimates and standard errors (in parentheses) from analyses of remittances and DEI effects on new venture founding in up to 35 countries observed from 2001 to 2010. Hypotheses 1 (Columns 1 and 4), 2a (Column 2 and 5) and 2b (Columns 3 and 6) are assessed, which predicted that DEIs would increase venture activity and magnify the venture investment impact of remittances. The dependent measure in Columns 1–3 is VentureFounding, while in Columns 4–6 it is VentureFunding. VentureFounding (VentureFunding) models were estimated in Stata using panel negative binomial (panel generalized least squares) estimation with country fixed effects and year dummies.

+p < 10%; *p > 5%; **p > 1%; ***p > 0.1%.

Table 3

Regression analyses, high-status DEI effects, founding DV (Hypotheses 3a and 3b)

Variables

(1)

(2)

(3)

(4)

(5)

Founding

Founding

Founding

Founding

Founding

XTNBREG

XTNBREG

XTNBREG

XTNBREG

XTNBREG

GDP

− 0.25*

− 0.25*

− 0.26*

− 0.27*

− 0.26*

(0.12)

(0.11)

(0.12)

(0.12)

(0.11)

Economic Growth

0.02

0.01

0.02

0.02

0.01

(0.01)

(0.01)

(0.01)

(0.01)

(0.01)

Wealth

0.00

0.00

0.00

0.00

0.00

(0.00)

(0.00)

(0.00)

(0.00)

(0.00)

Inflation

2.99**

3.03**

2.98**

2.98**

3.11**

(0.88)

(0.85)

(0.88)

(0.91)

(0.89)

Rule of Law

0.46**

0.43*

0.47**

0.47**

0.45*

(0.18)

(0.18)

(0.18)

(0.18)

(0.18)

Govt Share of Economy

0.00

0.01

0.00

0.01

0.01

(0.02)

(0.02)

(0.02)

(0.02)

(0.02)

Economic Openness

− 0.00*

− 0.01*

− 0.01*

− 0.01*

− 0.01**

(0.00)

(0.00)

(0.00)

(0.00)

(0.00)

Diaspora Size

0.47**

0.51**

0.50**

0.52**

0.57**

(0.17)

(0.16)

(0.17)

(0.17)

(0.17)

Foreign Aid

1.86

1.36

1.82

1.76

1.20

(1.97)

(1.98)

(1.95)

(1.96)

(1.99)

Portfolio Investment

0.00

0.00

0.00

0.00

0.00

(0.01)

(0.01)

(0.01)

(0.01)

(0.01)

Foreign Direct Investment

0.97

1.10

0.94

0.87

1.08

(1.12)

(1.11)

(1.12)

(1.13)

(1.13)

Remittances

3.31**

2.76*

3.34**

3.27**

2.67*

(1.25)

(1.29)

(1.23)

(1.23)

(1.29)

High Status DEI

0.02

− 0.57*

  

− 0.67**

(0.14)

(0.24)

  

(0.25)

Remittances × HighStatusDEI

 

6.63*

  

7.36**

 

(2.77)

  

(2.85)

Low Status DEI

  

− 0.06

− 0.17

− 0.27

  

(0.13)

(0.17)

(0.17)

Remittances × LowStatusDEI

   

0.66

1.55

   

(1.40)

(1.36)

Constant

1.95

1.58

1.89

1.64

1.00

(1.79)

(1.80)

(1.77)

(1.77)

(1.79)

n (Country n)

213

213

213

213

213

(35)

(35)

(35)

(35)

(35)

This table presents point estimates and standard errors (in parentheses) from analyses of remittances and DEI moderating effects on new venture founding (Founding) in 35 countries observed from 2001 to 2010. Columns 1 and 2 test the impact of High Status DEIs, while Columns 3–4 provide the comparison case of Low Status DEIs. Column 5 represents a fully partitioned model with both interaction effects. Equations were estimated in Stata using panel negative binomial (xtnbreg) estimation with country fixed effects and year dummies.

+p < 10%; *p < 5%; **p < 1%; ***p < 0.1%.

Hypothesis 1 is supported. Remittances have a measurable impact on both the funding and the founding of new businesses in developing countries. Observe that, in Table 2, Columns 1 and 4, the coefficient for Remittances is both positive and statistically significant (coef. = 3.29, p < .01 and coef. = 2.99, p < .05, respectively). Looking first at Column 1 for an explanation of remittances’ practical effect on new business founding, the results suggest that when holding all other values at their means, a 1%increase in Remittances as a percentage of GDP (from 6% to 7%) increases the rate of new business starts by approximately 3% (1.03 = exp(3.29 × 0.01)). A comparable impact can be found in the venture funding model results reported in Table 2, Column 4. There, a 1% increase in Remittances as a percentage of GDP increases VentureFunding from 2.92 to 2.95 (2.95 = 2.92 + 2.99 × 0.01). In practical terms, on the 2010 World Governance Index rankings for this measure of capital availability, such an increase results in a 4-spot rise in the rankings (from 44th place to 40th place out of 138 assessed countries) (Schwab, 2013). Together, these results provide strong evidence that remittances positively enhance the broader environment of entrepreneurship and economic growth.

Table 2 also builds on these analyses by introducing a key term, DEI, and its interaction with Remittances, thus allowing a formal test of Hypothesis 2, which predicted that DEIs would have a direct positive impact on new venture funding and founding (Hypothesis 2a), and would positively moderate the venture funding and venture founding impact of remittances (Hypothesis 2b). This hypothesis garners partial support. As it relates to Hypothesis 2a, the coefficient for DEI is negative and insignificant in Table 2, Columns 2 and 4, suggesting that the overall effect of DEIs on venture investment activity does not appear to be direct (i.e., influencing the volume of diaspora remittances). The mechanism of influence, if any, would necessarily be through alternative channels.

Hypothesis 2b is more strongly supported in related analyses on the moderating impact of DEIs on venture activity. The coefficient for the interaction between Remittances and DEI is positive and significant (coef. = 2.68, p < 0.05) in the founding model (Table 2, Column 3), while in the funding model (Table 2, Column 6), the coefficient, although positive, lacks statistical significance. This suggests that the moderating impact of DEIs on the relationship between remittances and venture activity is more far-reaching in its impacts than the direct effect, and that the impact has largely to do with formal new business registrations, rather than the availability of capital for new ventures.4

Based on the results in Table 2, Column 3, a country with a DEI that experiences a 1% increase in remittances as a percentage of GDP (from 6% to 7%) will experience a 6% increase in the rate of new business starts (1.06 = exp(3.15 × .01 + 2.68 × (1) × .01), holding all other variables at their means. In comparison, in a country without a DEI, a 1% increase in remittances as a percentage of GDP leads to only a 3% increase in the rate of new business starts (1.03 = exp(3.15 × .01 + 2.68 × (0) × .01). This moderating relationship is represented graphically in FigureI1. Note the much steeper slope delineating the relationship between remittances and new business starts when countries have DEIs.
Figure 1

Moderating effect of DEIs on venture founding. This is a two-way interaction graph of remittances and DEIs based on Table 2, Column 3. The binary moderator is represented by values of 0 and 1, while high and low remittance values are ± one standard deviation from the mean. All other variables are set to their mean values. The y axis represents the rate of new business registrations (VentureFounding).

We now introduce analysis of our first DEI-based characteristic: its status. This allows for an empirical test of Hypothesis 3, which predicted that the main effect and moderating impact of DEIs would be greater for higher status DEIs than for lower status DEIs. We test this by categorizing DEIs based on their relative place in the governmental hierarchy. To test Hypothesis 3, we create a dummy variable that is equal to 1 if a DEI occupies one of the top two positions in the hierarchy in either the legislative or the executive branch.5 Table 3 presents analyses of Hypothesis 3 for VentureFounding.

The results partially support the predicted effect. We first examine the VentureFounding results in Table 3. Although the main effect of HighStatusDEI is positive (Column 1) and the main effect of LowStatusDEI is negative (Column 3), neither coefficient reaches statistical significance, indicating a failure to support Hypothesis 3a regarding the direct effect of high-status DEIs. However, the interaction term for Remittances × HighStatusDEI is positive and statistically significant in Table 3, Columns 2 and 5 (coef. = 6.63, p < 0.05 and coef. = 7.36, p < 0.01, respectively). In practical terms, for a country with a prominent DEI, each 1% increase in remittances as a percentage of GDP is associated with a 10% increase in the rate of new business starts (1.10 = exp(2.76 × .01 + 6.63 × (1) × .01). The corresponding interaction term for LowStatusDEI indicates no such moderating impact: although the coefficient is positive, its practical and statistical significance are insubstantial. The level of DEI prominence seems to matter for purposes of targeting remittances toward venture investment activity, consistent with our social exchange and social identification theoretical frameworks.

We now introduce our second DEI-based characteristic: its location in the bureaucracy, specifically whether it is housed in the legislative or executive branch of government. This allows for an empirical test of Hypothesis 4, which predicted that a DEI housed in a legislative office would have a greater direct and moderating impact than a DEI housed in an executive body. The results partially support the predicted effect. We examine the VentureFounding results in Table 4, in which the results for the main effects of legislative versus executive DEIs are opposite the hypothesized prediction: the direct effect of ExecutiveDEI is positive and statistically significant (coef. = 0.21, p < 0.05), while the direct effect of LegislativeDEI is negative and marginally significant (coef. = − 0.32, p < 0.10). This suggests that, instead of legislative DEIs directly spurring greater venture activity by inducing reciprocation and identity-based loyalty, executive DEIs may have greater resources to organize investment conferences or other events to attract investment directly.
Table 4

Regression analyses, legislative DEI effects, founding DV (Hypotheses 4a and 4b)

Variables

(1)

(2)

(3)

(4)

(5)

Founding

Founding

Founding

Founding

Founding

XTNBREG

XTNBREG

XTNBREG

XTNBREG

XTNBREG

GDP

− 0.24*

− 0.19

− 0.22+

− 0.23*

− 0.18

(0.12)

(0.12)

(0.11)

(0.11)

(0.12)

Economic Growth

0.02

0.02

0.02

0.02

0.02

(0.01)

(0.01)

(0.01)

(0.01)

(0.01)

Wealth

0.00

0.00

0.00

0.00

0.00

(0.00)

(0.00)

(0.00)

(0.00)

(0.00)

Inflation

2.66**

2.67**

2.96**

3.17**

2.86**

(0.87)

(0.86)

(0.87)

(0.90)

(0.88)

Rule of Law

0.51**

0.50**

0.43*

0.43*

0.48**

(0.18)

(0.18)

(0.18)

(0.18)

(0.18)

Govt Share of Economy

− 0.00

− 0.01

− 0.00

0.00

− 0.00

(0.02)

(0.02)

(0.02)

(0.02)

(0.02)

Economic Openness

− 0.00*

− 0.00*

− 0.00*

− 0.00*

− 0.00*

(0.00)

(0.00)

(0.00)

(0.00)

(0.00)

Diaspora Size

0.52**

0.52**

0.42**

0.44**

0.51**

(0.17)

(0.16)

(0.16)

(0.16)

(0.16)

Foreign Aid

1.94

2.01

2.12

2.21

2.18

(1.94)

(1.93)

(1.92)

(1.93)

(1.93)

Portfolio Investment

0.00

0.00

− 0.00

0.00

0.00

(0.01)

(0.01)

(0.01)

(0.01)

(0.01)

Foreign Direct Investment

1.17

1.27

1.16

1.19

1.39

(1.11)

(1.11)

(1.12)

(1.12)

(1.12)

Remittances

3.28**

3.42**

3.42**

3.25*

3.27**

(1.22)

(1.20)

(1.24)

(1.27)

(1.24)

Legislative DEI

− 0.32+

− 1.03*

  

− 0.96+

(0.18)

(0.49)

  

(0.54)

Remittance × LegislativeDEI

 

6.54+

  

5.69

 

(3.62)

  

(4.08)

Executive DEI

  

0.21*

0.02

− 0.10

  

(0.10)

(0.14)

(0.15)

Remittances × ExecutiveDEI

   

1.29

1.61

   

(1.35)

(1.37)

Constant

1.22

0.15

1.87

1.84

0.10

(1.82)

(1.95)

(1.80)

(1.79)

(1.98)

n (Country n)

213

213

213

213

213

(35)

(35)

(35)

(35)

(35)

This table presents point estimates and standard errors (in parentheses) from analyses of remittances and DEI moderating effects on new venture founding in 35 countries observed from 2001 to 2010. Columns 1 and 2 test the impact of legislative-based DEIs, while Columns 3–4 provide the comparison case of executive-based DEIs. Column 5 represents a fully partitioned model with both interaction effects. Equations were estimated in Stata using panel negative binomial (xtnbreg) estimation with country fixed effects and year dummies.

+p < 10%; *p < 5%; **p < 1%; ***p < 0.1%.

The remittance moderation hypothesis, however, is supported in the context of VentureFounding. The coefficient for Remittances × LegislativeDEI is positive and marginally significant (coef.= 6.54, p < 0.10) in Table 4, Column 2, while the Remittances × ExecutiveDEI coefficient, though positive, fails to reach statistical significance. Based on the Column 2 results, the practical impact of a legislative DEI is such that a 1% increase in remittances as a percentage of GDP (from 6% to 7% of GDP) leads to a 10% increase in the rate of new business starts (1.10 = exp(3.42 × .01 + 6.54 × (1) × .01). This lends support to the theoretical insight regarding the representativeness of legislative DEIs and their identity impact on diasporans. Although Remittances × LegDEI falls slightly short of statistical significance (coef. = 5.69, p = 0.16) in the fully partitioned model including both interaction terms (Table 4, Column 5), it is important to recognize that these two categories (Legislative and Executive DEIs) are not entirely mutually exclusive. Given that some countries have multiple DEIs, the loss of significance may be attributed to the fact that the interaction term in the combined model represents the effect of legislative DEIs when there are no executive DEIs. Perhaps the combination of the two proves to be especially valuable. Taken together, the evidence suggests some support for Hypothesis 4b, which predicted that legislative DEIs would have a greater venture-enhancing impact through remittances than DEIs housed in the executive branch. There was no support (in fact. contrary evidence), however, for Hypothesis 4a, which predicted a main positive effect of legislative DEIs.

Robustness Analyses

To ensure the robustness of our empirical finding, we performed a number of supplementary analyses. The results reported above are vulnerable to criticism that the establishment of a DEI is a symptom or a result of a broader home-country institutional capacity, rather than an independent driver of the magnified effect of remittances on home-country venture activity. If this alternative hypothesis is correct, the observed effect should disappear or be dampened once we account for the quality of home-country institutions. To address this possibility, in an unreported analysis (available from the authors upon request), we split our sample based on high and low levels of institutional quality, using the Regulatory Quality measure from the World Governance Indicators (Kaufmann, Kraay, & Mastruzzi, 2009). In an estimation using the VentureFounding dependent measure, we observe that the Remittances × DEI interaction is positive and significant in both our low and high institutional quality conditions, suggesting that the observed DEI effects are not just the result of broader underlying institutional resources or capabilities.

To more specifically address concerns regarding the potential endogeneity of DEIs, we also perform supplemental two- stage analyses using Stata’s xtivreg command. In the first stage, we predict the likelihood of a DEI based on a country’s level of diplomatic exchange (from the Correlates of War dataset available at correlatesofwar.org), which is indicative of the home-country orientation toward broader world politics, but not likely to be strongly correlated with new business starts, one indicator of venture activity (see Gamlen et al., 2019). The second stage uses the predicted value of DEI for the main and interaction effects outlined in Equation 1. The coefficient for the interaction Remittances × DEI_predicted remains positive and significant, suggesting that the positive moderating impact of DEIs remains even when addressing their possible endogeneity. This strengthens support for Hypothesis 2b and for the findings that follow.

Discussion and Conclusion

The objective of this study was to explore whether and how an increasingly popular form of governmental activity, the formation and operation of a diaspora engagement institution, has economic impacts through directing remittances toward the funding and founding of new business ventures. Although some prior research has addressed the broader topic of engagement with diaspora populations (Brinkerhoff, 2012; Smith, 2003), it has largely been case-study or conceptual work, or efforts to determine the drivers of diaspora engagement (Gamlen, 2019). DEIs are proliferating very rapidly and are being recommended widely to governments by international organizations and consultancies; diaspora engagement has been the focus of hundreds of millions of development investment dollars in recent years. However, this is (to our knowledge) among the first cross-country empirical studies of the venture investment impact of DEIs.

Our hypotheses and empirical tests were designed to show that DEIs had an economic effect, and to suggest how and why .We showed evidence consistent with the proposition that DEIs induce social exchange obligations among diaspora members, which are then reciprocated through venture investment activity: they help emigrants and their descendants to trust the authorities at home, when such trust is often scarce. Our results help show how DEIs influence the investment behaviors of emigrants and their descendants in the diaspora. We examine the second-order economic and entrepreneurial effects of a particular form of state policy – a DEI – that acts within a particular and unusual gray zone between domestic and IB policy. We believe that such a migration-focused context represents a rich arena for future research in the management, entrepreneurship, and IB, including, for example, the relationship between migration and the UN Sustainable Development Goals (SDGs). Recent work in sustainability policy has shown that the bureaucratic characteristics and heterogeneity of national-level institutions can result in tremendous differences in policy implementation, even under similar or identical international policy regimes (Rawhouser, Cummings, & Hiatt, 2019). Given the importance of migration for achieving the SDGs (Foresti, Hagen-Zanker, & Dempster, 2018), and our finding that not only the existence but also the type of diaspora institution impacted the effectiveness of its engagement for venture activity, future work could examine the role of formal diaspora engagement and other migration policies in shaping the relationship between migration and other economic or environmental dimensions of sustainability.

Our results suggest that, if DEIs have an economic impact, it is likely because they engineer trust by creating social identity-based loyalty and/or social exchange obligations. Our results provide a partial answer to the question of whether DEIs support venture investment activities (yes), and also the question of how they matter and under what circumstances. DEIs seem to shift venture activity in developing countries mainly by shifting the investment patterns and behaviors of migrants: they seem to actively change both the composition and the impact of the massive remittances that flow inward to developing countries from emigrants and their descendants. However, our study does have limitations because we don not have any evidence to suggest that DEIs are directly impacting the broader capital environment or that they are inducing migrants to attract non-migrant FDI or other investment.

This phenomenon and related findings have significant implications for research and practice. Given the potential importance of IB in poverty alleviation (Kol, Rivera-Santos, and Rufin, 2018), future work in transnational entrepreneurship (Bagwell, 2015; Chen & Tan, 2009) could build on our social exchange framework and empirical findings to ask after whether DEIs facilitate not just migrant remittance-induced entrepreneurial activity but also the prevalence and success of returnee entrepreneurs (Pruthi, 2014) or diaspora-influenced multinational enterprises engaged in FDI (Li, Hernandez, & Gwon, 2019). And, given the prevalence of state-owned enterprises (SOEs) operating in the global economy (Cuervo-Cazurra, Inkpen, Musacchio, & Ramaswamy 2014), there is potential for additional research examining whether and how DEIs are able to harness overseas migrants in support of their SOEs’ inward or outward investment strategies.

In another vein, our empirical results show a moderating impact of DEIs on the relationship between remittances and new business registrations, which is a measure that is biased toward more productive and more formal participants in the economy than their unregistered, informal counterparts. Future work could productively examine the effects of DEIs for informal entrepreneurs (Webb, Bruton, Tihanyi, & Ireland, 2013), as well as those operating under formal or informal institutional voids (Webb, Khoury, & Hitt, 2019).

Additionally, as origin states and international policy-makers become more aware of which approaches to diaspora engagement are more (or less) effective, they can better harness the valuable economic, social, and knowledge resources of their migrants living abroad. Existing IB and policy research (Leblang, 2010; Ratha, 2011) has identified several conditions affecting whether or not diasporas can positively impact their home countries: the condition we highlight is whether or not the state has a formal diaspora engagement institution. Migration-related NGOs such as the International Organization on Migration, the Migration Policy Institute, and the World Bank care deeply about making migration work both for the diaspora members who have gone abroad as well as for those who have remained, and this study adds credibility to the idea that formal engagement of migrants matters (Agunias & Newland, 2012). There is an urgent need to evaluate and improve the impacts of the DEIs that are proliferating globally at the behest of such organizations, despite prominent conflicting sovereignty claims arising from these trends (Gamlen, 2014). By rigorously evaluating a central aim of DEIs – that is, their moderating effect on the venture-investment impacts of remittances in developing countries – we point the way for future research on the impacts of diaspora engagement, and the importance of migration for the IB policy research agenda.

Notes

  1. 1

    ‘Diaspora’ is a hotly contested term, but, put simply, it refers to ‘an imagined community dispersed from a professed homeland’ (Vertovec 2009: 5). We use ‘diaspora’ more or less synonymously with ‘emigrants and their descendants’. For a detailed analysis of the term, its significance, and the field of diaspora studies, see, for example, Cohen, 2008, or refer to recent issues of the journal Diaspora.

     
  2. 2

    Note that there are slightly fewer observations in the VentureFunding models. This is because, during the time period in question, the World Economic Forum did not perform complete economic surveys in Moldova or Togo.

     
  3. 3

    To decide on the appropriate count model, we regressed VentureFounding on all control variables, Remittances, and country and year dummies using the user-written Stata command countfit which, among other things, compares the predictive value and goodness-of-fit between various count models (Long & Freese, 2014). In head-to-head pairwise comparisons between negative binomial, Poisson, zero-inflated negative binomial, and zero-inflated Poisson models, the results strongly indicated that the negative binomial model was preferred over all others in terms of its goodness-of-fit and ability to minimize information loss (p < 0.01).

     
  4. 4

    Because of this finding related to Hypothesis 2, for the remainder of our analyses, we report only the direct and moderating impact of DEIs on VentureFounding, rather than multiple null results in relation to VentureFunding.

     
  5. 5

    Executive DEIs fall into one of four categories: (1) ministries solely dedicated to the diaspora; (2) ministries that shares another executive function (such as culture or foreign affairs); (3) Administrative departments or units that focus on diaspora affairs; or (4) interdepartmental committees that focus on diaspora affairs and are made up of individuals from several offices. Legislative DEIs fall into one of three categories based on their organizational hierarchy and autonomy: (1) stand-alone DEIs in the legislative office; (2) diaspora have a dedicated legislative seat; or (3) legislative diaspora advisory councils to provide a nonbinding voice on policy and law.

     

Notes

Acknowledgments

This research (particularly the data-gathering effort) was supported by the Oxford Diasporas Programme funded by the Leverhulme Trust and a generous Carlson School of Management dissertation fellowship. We thank Harry Sapienza, Dan Forbes, and Paul Vaaler for guidance on this project and related work. We have also benefited from helpful comments at the 2013 International Association for Business and Society meeting and the 2016 Academy of Management Annual Meeting. All errors are ours.

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© Academy of International Business 2019

Authors and Affiliations

  1. 1.Walton College of BusinessUniversity of ArkansasFayettevilleUSA
  2. 2.School of Social SciencesMonash UniversityMelbourneAustralia

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