Benefitting from immigration: The value of immigrants’ country knowledge for firm internationalization

Abstract

Migrants are able to provide firms with knowledge about their country of origin. This can become a valuable source of knowledge for firms in the process of internationalization. Relating to a Knowledge-Based-View perspective, this paper explains how the resource commitment of firms to foreign countries is contingent on immigration from those countries: Immigrants' country knowledge reduces uncertainty and makes the governance of foreign operations more efficient. Moreover, this paper connects the relevance of knowledge for firm internationalization to institutional characteristics in immigrants' home and host countries, both of which policymakers can shape. We test predictions on more than 13,000 observations over a 14-year period (2003-2016). The paper identifies economically significant contingencies of a positive effect of immigration, which are robust to changes in model specification, measurement, and sampling. The results indicate how immigration can shape firms' investments abroad and have implications for developing policy as well as international business theory.

The diaspora phenomenon: scholarly assessment and implications for countries and firms

“…Regarding diasporas' local host country firms, diasporans, especially highly skilled members, can provide innovations, technology and, generally, knowledge transfer (Foley and Kerr, 2013;Gagliardi, 2014;Kunczer et al, 2019) to increase a firm's competiveness (Elo and Vincze, 2019). Firms from diasporas' host countries can use diaspora networks in order to get access to the tacit knowledge they need.…”

“…There is also a significant role for diasporans in their minority entrepreneurs' firms or family businesses located in host countries (Guercini et al, 2017). Thus, knowledge transfer from diasporas to their host country organizations can be realized directly via the employment of diaspora members ( (Kunczer et al, 2019), ownership (Tung and Chung, 2010) or diaspora engagement institutions established within destination settlings (Agunias and Newland, 2012;Lazin, 2001).…”

Migrants, migration policies, and international business research: Current trends and new directions

“…Another article in the special issue by Kunczer, Lindner, and Puck (2019) investigates the influence of migrants on MNE decisions about where to invest abroad. Since Leblang's (2010) path-breaking study of migrant influence on outward FDI, researchers in IB (e.g., Shukla & Cantwell, 2018) and related fields have been investigating underlying mechanisms.…”

“…The articles in this special issue contributed insights on how these flows may vary due to, say, home-country diaspora engagement institution type immigration system points (Chand & Tung, 2019) or PPP design (Poliakova et al, 2019) enticing these flows, or broader social attitudes toward the migrant executives directing these flows (Kautto, 2019). They contributed insights on how these flows may vary due to host-country factors like migrant knowledge (Kunczer et al, 2019) or the conditions of migrant arrival (Christensen et al, 2019), maybe even the MNE stewardship (Reade et al, 2019), or the strength of professional purpose (Emmanuel et al, 2019). By studying these home-and host-country factors, we gain insight on current MMP issues and their implications for IB executives and investors looking to benefit from migrant movements, migrant money, and migrant knowledge.…”

“…The articles we curated for the special issue address these and other new or renewed MMP issues confronting IB executives and investors. They analyze IB research and practice implications of: a dramatic rise in the value of migrant remittances to and the number of migrant ministries in many developing countries ; an escalating battle for skilled migrants only a few developing countries are producing but many developed-country MNEs need (Chand & Tung, 2019;Emmanuel, Elo, & Piekkari, 2019); a change in the mix of migrants ''pulled'' to host countries by economic opportunity versus migrants ''pushed'' from home countries by conflict, violence, and persecution (Christensen, Newman, Herrick & Godfrey, 2019); a debate about how migrants influence the direction of FDI from their host countries (Kunczer, Lindner & Puck, 2019); a shift in home-country citizen attitudes that now treat migrants living abroad as role models rather than renegades (Kautto, 2019); a trend among MNEs operating in ''fragile states'' to hire and train refugees as hedges against political risks and demonstrations of corporate social responsibility (CSR) (Reade, Oetzel, & McKenna, 2019); and a growth in public-private partnerships between government-run investment development agencies offering financial incentives to attract inward FDI and non-governmental migrant community organizations able to identify firms abroad more likely to respond to those incentives (Poliakova, Riddle, & Cummings, 2019).…”