Focal Area: Diaspora Investment and Entrepreneurship
Advances in transportation and communication technology allow U.S. immigrant communities to connect with their homelands in ways unimaginable in the past. The result is the growth of diaspora communities, defined as a group of individuals sharing ethnic identity who live outside of their countries of origin but maintain strong sentimental and material links with their homelands. Such communities help facilitate commerce and encourage FDI by fostering information flows and improving contract enforcement in international transactions.
The growing prominence of Diaspora communities holds key implication for U.S. investors. Diaspora entrepreneurs may enjoy preferential access to homeland markets and engage in business strategies that differ from those described in the traditional International Business (IB) theory. Relevant questions include:
- How do the obstacles facing diaspora entrepreneurs differ from those facing traditional foreign investors?
- Does diaspora investment serve as a more stable source of capital than MNE investment, strengthening host countries' abilities to act as good trading partners?
- What is the relevance of traditional IB theories for diaspora entrepreneurial investment?
- How effective are partnership strategies between multinational corporations and diaspora entrepreneurs in facilitating market entry into developing countries?