social ties and venture creation by returnee entrepreneurs
TRANSCRIPT
International Business Review xxx (2014) xxx–xxx
G Model
IBR-1091; No. of Pages 14
Social ties and venture creation by returnee entrepreneurs
Sarika Pruthi *
Department of Management, King’s College London, 150 Stamford Street, London SE1 9NH, United Kingdom
A R T I C L E I N F O
Article history:
Received 8 May 2013
Received in revised form 14 February 2014
Accepted 31 March 2014
Available online xxx
Keywords:
Ethnic entrepreneurs
India
Returnee entrepreneurs
Social ties
Strong ties
Transnational entrepreneurs
Venture creation
Weak ties
A B S T R A C T
Recent years have witnessed the return of individuals of Indian or Chinese origin from developed
markets to their home countries to start new ventures. Returnee Entrepreneurs (REs) facilitate both
direct technology transfer and indirect technology spillovers to local firms, thus contributing to the
technological development of emerging economies. Much previous work is based on the integration of
ethnic entrepreneurs in their host countries or business activities of transnational entrepreneurs that
traverse their host and home countries. This study explores the role of social ties in venture creation by
REs. Based on twenty case studies in India, the findings show that (1) local ties are indispensable for
venture creation, and (2) the heterogeneity in the way REs leverage social ties across the host and home
countries is contingent on the location of their intention to start up and generation of idea for their
venture. The implications of these findings are discussed.
� 2014 Elsevier Ltd. All rights reserved.
Contents lists available at ScienceDirect
International Business Review
jo u rn al h om epag e: ww w.els evier .c o m/lo cat e/ ibu s rev
1. Introduction
Recent years have witnessed the return of individuals of Indianor Chinese origin from developed markets to their home countriesto start their own ventures. As in prior studies (Filatotchev, Liu,Buck, & Wright, 2009; Wright, Liu, Buck, & Filatotchev, 2008),returnee entrepreneurs (REs) are defined as skilled personnel thathave lived in a developed country for the purpose of work or studyand have returned to their home country to start a new ventureafter several years of business experience and/or education abroad.Recent evidence from China suggests that REs facilitate both directtechnology transfer and indirect technology spillovers to localfirms, thus contributing to the technological development ofemerging economies (Filatotchev et al., 2009; Liu, Lu, Filatotchev,Buck, & Wright, 2010). Yet, much previous work is based on theintegration of ethnic entrepreneurs (EEs) in their host countries(Light & Gold, 2000; Portes & Jensen, 1989) or business activities oftransnational entrepreneurs (TEs) that traverse their host andhome countries (Patel & Conklin, 2009; Terjesen & Elam, 2009).
The objective of this paper is to explore the role of social ties inventure creation by REs. Unlike EEs that integrate with their hostcountry, REs relocate to live at home after a period of residingabroad. The social ties developed abroad may not be appropriate
* Tel.: +44 0207 848 3720.
E-mail address: [email protected]
Please cite this article in press as: Pruthi, S. Social ties and venture c(2014), http://dx.doi.org/10.1016/j.ibusrev.2014.03.012
http://dx.doi.org/10.1016/j.ibusrev.2014.03.012
0969-5931/� 2014 Elsevier Ltd. All rights reserved.
for the home environment due to considerable heterogeneity inthe rules of the game for doing business in developed and emergingeconomies (Hoskisson, Wright, Filatotchev, & Peng, 2013; La Porta,Lopez-De-Silanes, Shleifer, & Vishny, 1998). Although personal tiesof family or friends may facilitate return and enable REs to re-establish a link with the local environment after a period ofsustained absence from home (Drori, Honig, & Wright, 2009), priorconnections beyond the family may need to be re-built in order totranslate ideas into opportunities (Bagwell, 2007). The develop-ment of local ties may be critical especially in a context wheresocial networks enable access to resources in the absence of stronglegal institutions (Bruton, Ahlstrom, & Wan, 2003). The role ofethnic networks of immigrant owner-founders in the recognitionand exploitation of opportunities as they enter their home countryhas received recent research attention. However, this evidence isbased on the internationalization of small firms (Chandra, Styles, &Wilkinson, 2013; Chung & Tung, 2013; Ojala, 2009) or newventures (Coviello, 2006) located in developed countries. Thefollowing research question is addressed in this paper: to whatextent REs leverage their social ties across their host and homecountries to create a new venture and why?
The focus of this study is on India as an appropriate context inwhich to examine this issue. As one of the fastest growingeconomies globally (Cavusgil, Ghauri, & Akcal, 2013), Indiaattracted approximately 35,000 skilled professionals back homemainly from the US in the two years immediately after the ‘dotcombust’ (Parthasarathy & Aoyama, 2006). As in China, social ties have
reation by returnee entrepreneurs. International Business Review
S. Pruthi / International Business Review xxx (2014) xxx–xxx2
G Model
IBR-1091; No. of Pages 14
been associated with the value system and work ethic of India’stransnational elite. However, unlike policy makers in China thathave aggressively facilitated the return of their skilled personnelfrom overseas, Indian policy makers have been more hands-off intheir approach (Saxenian, 2002, 2005). Unlike in China, wherereturnees have focused on developing products primarily for thedomestic market, Indian TEs have been oriented toward providingsoftware and other services for export, and learning has beencontained within the transnational firm. Returnees’ interactionswith local customers or institutions may thus be vital to upgradingthe capabilities of domestic firms and building the local ecosystemas they physically relocate to India to start their ventures. Yet, priorstudies on REs are mainly focused on China (Wright et al., 2008)and little is known about how REs leverage social ties as theyreturn to an environment where institutional support forentrepreneurial activity is thin.
The paper makes several contributions to the internationalentrepreneurship (IE) literature. First, it contributes to the specificliterature relating to REs. With the exception of recent research inChina that examines the role of returnees in knowledge spilloversto local firms (Liu et al., 2010) or location choice of REs at scienceparks (Wright et al., 2008), the literature on REs is sparse. Anunderstanding of returnees’ networks may be useful, especially inthe context of policy rhetoric related to the significance ofdecentralized, rather than top-down, measures and firm-buildingcapabilities for the development of entrepreneurship in emergingeconomies (Goldfarb & Henrekson, 2003). Second, the paper uses astrong and weak tie framework to investigate REs’ networks.Entrepreneurial processes of opportunity recognition and resourceacquisition require different combinations of strong and weak ties(Elfring & Hulsink, 2007) and different network profiles areassociated with different dimensions of performance (Han, 2006).Yet, few studies have examined the structure of entrepreneurs’networks across international boundaries (Chen & Tan, 2009). Inexamining the function and utility of REs’ social ties, this papercontributes to both the literature on networks (Hoang & Antoncic,2003) and the IE literature (Bruton, Ahlstrom, & Obloj, 2008). Third,in focusing on REs in India, this paper extends the IE literature toincorporate links between developed and emerging economies. Anunderstanding of entrepreneurship in emerging economies is quitelimited despite their growing prominence (Kiss, Danis, & Cavusgil,2012). India is one of the most important emerging players in theworld economic arena and a unique institutional contextcompared to other emerging economies such as China, yet, studiesbased on India in the IE literature are few (Bruton et al., 2008). Anunderstanding of returnees’ networks and their potential role inupgrading domestic entrepreneurial capability in the context ofrelatively thin institutional support for REs may thus go beyond thegeneralization of previous studies on international entrepreneursin emerging economies.
The structure of the paper is as follows. The nature of theinstitutional context for the return of skilled personnel in India isreviewed in Section 2, followed by the theoretical background forthe study in Section 3. The research methodology is outlined inSection 4. The findings, and the propositions based on thesefindings, are presented in Section 5. Section 6 discusses theimplications of the findings, and Section 7 concludes.
2. Highly-skilled returnees in India: context and significance
India is an important source of skilled personnel to developedeconomies, in particular, the United States (US) (Mani, 2004) andUnited Kingdom (UK) (McEwan, Pollard, & Henry, 2005). Since the1990s, many senior Indian professionals in the US have beeninfluencing their corporate employers to establish Indiansubsidiaries, invest in start-up firms, or shape government policy
Please cite this article in press as: Pruthi, S. Social ties and venture c(2014), http://dx.doi.org/10.1016/j.ibusrev.2014.03.012
(Saxenian, 2005). Recent advances in communication have shiftedthe key unit of production from the firm to technical communitiesof skilled professionals, developments that have led to theemergence of a fast-growing community that directly links theirhost country with India. In recent years, many of these skilledIndian migrants have permanently returned home (Dossani &Kenney, 2002). This section briefly outlines the distinctive featuresof the institutional environment in India as impacting uponreturnees’ entrepreneurial behavior.
Since the 1990s, the Indian government has undertaken severalreforms to stimulate entrepreneurship. As in China, a proactivepolicy toward innovation and establishment of Software Technol-ogy Parks (STPs) has created several opportunities in this sector(Parthasarathy & Aoyama, 2006; Saxenian, 2002). Referred to asthe ‘Silicon Valley of India’, the Indian city of Bangalore is a primeexample of the regional concentration of the software industrycharacterized by the presence of public and private sectorenterprises, noted science-based universities and research orga-nizations. However, unlike in China where policy has aggressivelycollaborated with research institutions to target physical infra-structure, state collaboration with universities and start-up firmsto upgrade local infrastructure in India is rare, and incentives foracademics to establish intellectual property rights and pursuecommercialization of their technologies are weak. Whereas Chinahas expanded the domestic market for IT and successfully linkedits public science & technology efforts with the commercialactivities of relatively autonomous industrial enterprises and spin-offs from state-owned institutions, growth in the indigenous ITindustry in India is mainly driven by low, value-added services andthe industry is dominated by a large number of small export-oriented firms (Saxenian, 2002). In contrast with China whereincentives such as cheap office space, start-up loans or tax holidaysare directed at attracting REs to indigenous science parks, taxincentives in designated STPs in India are mainly aimed atstimulating the growth of export-oriented software firms even asbureaucracy, corruption, and inadequate and expensive infrastruc-ture continue to hinder business activity of the expatriatecommunity in India.
The mobilization of social networks is an intrinsic part of thelocal culture in India in the context of limited access to resources inthe conduct of business (Birtchnell, 2011). The relative lack ofinstitutional support for REs in India raises further questions aboutthe role of their social ties in returning home and founding newventures. Virtually all research related to the cross-border flows ofpersonnel in India is centered on the migration of highly-skilledpersonnel to the US (D’Costa, 2004) or EEs of Indian origin asbusiness owners in the UK (Bachkaniwala, Wright, & Ram, 2001;Basu & Altinay, 2002). More recently, the contribution of Indian TEsabroad to the transfer of technical knowledge to India is beingrecognized (Saxenian, 2002, 2005). The issue of networks ofindividuals that have relocated to India to found new ventures,however, is relatively neglected. The next section presents thetheoretical background for the study.
3. Theoretical background
3.1. Social networks, social capital and effectuation
The important and varied role of social networks in theentrepreneurial process is well established in the entrepreneur-ship (Aldrich & Zimmer, 1986; Greve & Salaff, 2003) and socialcapital literatures (Adler & Kwon, 2002). Social networks can bethought of as the actual set of links of all kinds amongst a set ofindividuals (Jack, 2005) or organizations (Kontinen & Ojala, 2011).Consistent with growing interest in the micro-processes ofentrepreneurship and the role of managers’ actions to orchestrate
reation by returnee entrepreneurs. International Business Review
S. Pruthi / International Business Review xxx (2014) xxx–xxx 3
G Model
IBR-1091; No. of Pages 14
resources in venture creation (Sirmon, Hitt, Ireland, & Gilbert,2011), this paper is based on the networks of individual REs (Droriet al., 2009; Zahra, 2007). In the social capital literature, the valueof networks is attributed to social capital or the sum total ofresources embedded within, available through, and derived fromnetwork of relationships possessed by an individual or social unit(Nahapiet & Ghoshal, 1998). According to social capital theory, thepersonal and professional networks of entrepreneurs providesocial capital (Davidsson & Honig, 2003) and hence impact theperceived feasibility of creating a venture (Bandura, 2001). Socialnetworks lead to sources of information and ideas that triggeropportunities and provide resources for new ventures (Aldrich &Zimmer, 1986; Sullivan & Ford, 2014). Social networks also providelocal market information, business contacts or local sales anddistribution channels in foreign markets, thus reducing theperceived risks of entry into a new market (Coviello, 2006). Arecent stream of literature (e.g. Chung & Tung, 2013) investigatesthe role of ethnic networks in the entry of firms to entrepreneurs’home country. This literature suggests that ethnic networks alsoreduce the psychic distance between the host and home countriesand enable EEs to engage in high resource commitments at home atthe outset (Saxenian, 2002, 2005). However, this evidence is basedon the internationalization of existing firms. It is also not clear howentrepreneurs use their networks when entering their homecountry.
The role of social networks in areas where human action is themost important factor shaping the future is also highlighted byeffectuation theory (Read, Sarasvathy, Dew, Wiltbank, & Ohlsson,2010; Sarasvathy, 2001). Effectuation processes take a set of meansas given and focus on selecting between possible effects that can becreated with that set of means. Unlike causation logic thatemphasizes traditional planning to attain a fixed goal, effectuationtheory focuses on the circumstances of the decision maker thatform a given set of means that combine with contingencies tocreate an effect. As one of the sub-dimensions of effectuation,social networks of decision makers (or who they know) thus play akey role in creating an effect that is constructed as part of theeffectuation process. Network contacts with suppliers, customers,investors or other organizations help reduce uncertainty, minimizecost of experimenting with alternative strategies, and maintainflexibility in the entrepreneurial process (Chandler, DeTienne,McKelvie, & Mumford, 2011). However, although effectuationtheory acknowledges the role of social networks for spreading risksor testing markets in a situation of risk and uncertainty, little isknown about how these networks are used. The context of REs isappropriate to explore this issue as these individuals makedecisions to create a venture in the uncertain situation of returninghome. Although recent work in the IE literature has exploredeffectuation processes, it is focused on the internationalization ofborn global firms (Andersson, 2011). Against this backdrop, thefocus of this paper is on understanding how REs leverage socialnetworks across their host and home countries.
3.2. Social ties and new venture creation
This paper is focused on the social ties of REs. Social ties definethe strength and quality of relations within a network (Jack, 2005).Several network studies (e.g. Jack, 2005; Rowley, Behrens, &Krackhardt, 2000) draw on Granovetter’s (1973) strong and weakties hypothesis for understanding social networks, a frameworkthat is also adopted in this paper. Even though there is broadagreement that a network should consist of both strong and weakties given their diversity, homogeneity and heterogeneity (Gran-ovetter, 1973), evidence that underscores the importance of weakties has fueled the debate on the relative utility of strong and weakties (Jack, 2005). Typically including family and friends, strong ties
Please cite this article in press as: Pruthi, S. Social ties and venture c(2014), http://dx.doi.org/10.1016/j.ibusrev.2014.03.012
bind similar people in long term relationships (Starr & MacMillan,1993). Owing to their ability to exchange knowledge and enablecost savings, strong ties are important for evaluating opportunities,acquiring resources and gaining legitimacy (Elfring & Hulsink,2003). At the same time, however, strong ties are fraught with therisk of ‘overembeddedness’, or of insulation from externalinformation, thus stifling performance (Uzzi, 1997). Weak tiesrepresent bridges for access to novel and diverse information, thusenhancing the ability of entrepreneurs to spot opportunities.
Although Granovetter’s (1973) strong tie thesis is about thefrequency of contact and quality and intensity of a relationship, tiestrength has not been given a precise conceptual definition andthere is lack of consistency in how it is interpreted in the literature.As in prior studies, strong ties in this study are interpreted as directcontacts and personal (Jack, 2005) or industry links such as formercolleagues (Greve & Salaff, 2003) with whom REs are familiar ordevelop a bond based on their knowledge of, experience with, ortrust in these individuals over a period of time, irrespective of thefrequency of contact (Jack, 2005). As Jack (2005) argues, strong tiesmay be reactivated based on their utility in the entrepreneurialprocess. Typically newer, weak ties are characterized by infrequentinteraction, short duration of relationship and lack of close socio-emotional bond (Greve & Salaff, 2003; Sullivan & Ford, 2014). Theyare either directly established with people in diverse contexts or assecondary links from existing strong ties such as friends of friendsthat become partners, suppliers or customers (Hoang & Antoncic,2003).
As individuals that have lived and worked in a host country,returnees may accumulate social capital based on personal ties offamily or friends (Jack, 2005), industry ties such as formercolleagues, suppliers, customers and investors (Kontinen & Ojala,2011), or intermediary ties such as exhibitions, conferences orseminars that they may have attended to acquire informationabout new developments or identify opportunities (Greve & Salaff,2003; Ozgen & Baron, 2007). At the same time, strong family tiesmay be critical for re-establishing a link with the homeenvironment, especially in India where kinship-oriented tiesbased on adherence to traditional values and behavior areperceived to play a key role in local migration within the country(Banerjee, 1983). REs may also need to reach out to previouslyunknown industry or non-industry links beyond the family toaccess financial and human capital for translating ideas intoopportunities (Bagwell, 2007).
Although prior studies have examined the role of founders’networks for rapid internationalization of new ventures (Coviello,2006; Oviatt & McDougall, 2005) and international opportunityrecognition (Chandra et al., 2013) or foreign market entry of smallfirms (Chetty & Agndal, 2007), also to their country of origin(Chung & Tung, 2013), few studies have investigated the structureof entrepreneurs’ social ties across geographic boundaries (Chen &Tan, 2009). Strong transnational family ties are known tocontribute ideas for new ventures and provide co-ethnic laborfor the growth and diversification of businesses, but this evidenceis based on EEs in their host countries (Bagwell, 2007). Recently,Wadhwa, Jain, Saxenian, Gerefti, and Wang (2011) take up theissue of REs from the US in India to examine the nature of theirlinks with the US upon their return home. However, this work islimited to a descriptive, rather than an in-depth, analysis of theselinks. This paper explores the structure of REs’ social ties as theyreturn home and create new ventures. The following sectionoutlines the methodology for the study.
4. Research methodology
As in prior studies (Anderson & Miller, 2003; Jack, 2005), aqualitative methodology based on multiple case studies
reation by returnee entrepreneurs. International Business Review
Table 1Profile of REs in India.
Returnee Age Highest
degree
Host
country
Period of
stay abroad
(yrs)
Purpose
of stay
abroad
Length of
international
work
experience (yrs)
Mode of return to India
[Direct (founder of start-up)
or Indirect (employee of
another company)]
Year of
return
to India
Year
founded
start up
Industry of venture
Intention to start
up and clear
idea for venture
prior to return
Case C 33 MSc (Project
management)
USA 9 Work 7 Direct 2009 2009 Arts & Crafts
Case E 38 BA Commerce UK 2 Work 2 Direct 1996 1996 Security Services
Case K 38 BA (Law) UK; USA 11 Work & Study 10 Direct 2007 2007 Financial Services (Mortgages)
Case O 41 MBA UK 7 Work (as UK-head of local,
Indian firm) & Study
7 Direct 2006 2006 IT & Automotive
Case P 36 MBA USA 6 Work & Study 6 Direct 2004 2006 Incubation/Business Services
Case T 38 MBA USA 11 Work (internship) and Study 9 Direct 2006 2006 IT/Internet
Case Q 30 B Eng. USA 2 Work 1.5 Direct 2008 2008 IT Hardware
Intention to start
up but no clear
idea for venture
prior to return
Case A 24 MSc Physics Canada 0.75 Work (Research fellow) 0.75 Indirect 2011 2011 IT/Education
Case B 38 BA Commerce USA 2 Work 2 Indirect 1999 2007 IT/Software
Case D 48 PhD (Biotechnology) USA 12 Work & Study 15 Indirect
(employee of
US-based start-up)
1999 2010 Pharmaceuticals (Drug Discovery)
Case G 44 MSc (Marketing &
merchandising)
UK 2 Work (at UK office of local,
Indian firm)
2 Indirect 1999 2003 Management Consulting for Retail
Case H 39 PG Diploma
(Management)
USA 14.5 Work & Study 12 Indirect
(employee of
US-based company)
2007 2011 IT (Solar Power Technology)
Case I 45 PhD (IT) USA 16 Work & Study 13 Indirect
(employee
of start-up)
2005 2009 Knowledge Management Services
Case J 40 MBA USA 3 Work 8 Indirect
(employee of MNC)
2006 2011 Consumer Electronics
Case N 43 B Eng. (Electronics) USA 12 Work 16 Indirect 2009 2009 IT
Case R 37 MBA USA 14 Work & Study 12 Indirect 2008 2010 Software & IT Services
Case S 39 MBA USA 6 Work 12 Indirect
(employee of
US-based company)
2007 2008 IT Software
No intention
to start
up prior
to return
Case F 54 MBA Singapore 8 Work 8 Indirect (employee of MNC) 1996 2003 Pharmaceuticals
Case L 44 PhD (Economics) USA 7 Work & Study 0 Indirect (employee of local
research institution)
1996 1998 Economic Consulting
Case M 38 MBA Singapore 1 Work 2 Indirect 1999 2000 Education/IT
S. P
ruth
i /
Intern
atio
na
l B
usin
ess R
eview
xxx (2
01
4)
xxx–xxx
4 G M
od
el
IBR
-10
91
; N
o.
of
Pag
es 1
4
Ple
ase
cite th
is a
rticle in
pre
ss a
s: P
ruth
i, S
. S
ocia
l tie
s a
nd
ve
ntu
re cre
atio
n b
y re
turn
ee
en
trep
ren
eu
rs. In
terna
tion
al
Bu
siness
Rev
iew
(20
14
), h
ttp://d
x.d
oi.o
rg/1
0.1
01
6/j.ib
usre
v.2
01
4.0
3.0
12
S. Pruthi / International Business Review xxx (2014) xxx–xxx 5
G Model
IBR-1091; No. of Pages 14
(Creswell, 2003; Yin, 1994) was adopted to study returnees’networks. Even though qualitative studies are criticized foroffering only partial insights into networking behavior, a qualita-tive approach was chosen as the objective was to discern thereasons for choice of networks and provide thick description,detailed and rich analysis of networks across host and homecountries (Eisenhardt & Graebner, 2007).
Also as in prior studies (e.g. Greve & Salaff, 2003), an approachfocusing on the networks of individual REs was used (Drori et al.,2009; Zahra, 2007), and face-to-face interviews were chosen as themain data collection method. The fieldwork was conducted inthree phases over a two year period between October 2009 andNovember 2011. In the first phase in late 2009, three exploratoryinterviews, with two REs and one venture capitalist, wereconducted to gauge some semblance of returnee activity followingreferrals obtained through a networking event for entrepreneurs inNew Delhi. Collective insights from these interviews and theliterature established the potential contribution of the study andprovided the confidence to proceed with it. The literature reviewoutlined above provided a basis for data collection and analysis(Suddaby, 2006). The constant comparative method was used tosimultaneously collect and analyze data in Delhi, Gurgaon andBangalore between October 2010 and November 2011. Teninterviews were conducted in the first phase in 2010, and afurther ten in 2011.
The key source of information leading to the population of REsin India was The Indus Entrepreneurs (TiE). TiE is a Silicon-Valley-based networking organization for entrepreneurs of Indian originwith Chapters worldwide. Initial contacts with potential partici-pants were derived from the directory of charter members of TiE inDelhi, although in some cases it was difficult to establish whetherthey were REs simply by looking at their profiles. Individuals werecontacted via their company websites that often provided genericemail addresses for customer services, and by approaching the keyadministrative personnel at the TiE Chapters in Delhi andBangalore.
The returnees were selected using theoretical sampling(Strauss, 1987). Consistent with the definition of REs in theliterature (Wright et al., 2008), the individuals in the sample hadlived in a developed country for the purpose of work or study andrelocated to India to found a new venture after a period of residingabroad. The participants were sent advance notification regardingthe aims & objectives of the study and proposed schedule of theinterviews. A brief interview guide, including such questions asage, educational and professional background, host country andperiod of residence abroad, time of return to India, etc., wasdevised from the literature review (Drori et al., 2009; Wright et al.,2008) and administered to the REs during the meetings in order toguide the overall direction of the interviews. The first set ofinterviews was held with REs that were varied in terms ofeducational background or international experience such that itwas possible to compare them. In the second phase, the differenceswere maximized to enable the investigation of category propertiesin their greatest possible range.
The REs were asked to comment in detail about the processthrough which they returned to India and founded their ventures.Data collection continued until the additional interviews did notseem to generate any new conceptual categories (Suddaby, 2006).The length of the interviews varied from a minimum of 60 min to amaximum of 125 min, and yielded more than 35 h of interviewrecordings and 300 running pages of transcripts. All, except twoparticipants, allowed the interviews to be tape recorded. Thetechnique of cross-case analysis was used to check for patterns.Although qualitative software programs can be useful in organiz-ing and coding the data, they are no substitute for theinterpretation of data. Therefore, data were manually analyzed
Please cite this article in press as: Pruthi, S. Social ties and venture c(2014), http://dx.doi.org/10.1016/j.ibusrev.2014.03.012
and converted into conceptual categories through a critical anditerative process of identifying the key steps in the return andventure creation process and use of networks based on acombination of induction and deduction.
The data from the interviews were also triangulated withfactual information from a range of secondary sources in the publicdomain such as company websites, press releases and memberprofiles of the individuals in the TiE Directory where available inorder to produce a detailed case history for each firm, strengthenthe reliability of the accounts from the respondents and improvetheir recall (Huber & Power, 1985). Where the profiles were listedin the TiE Directory, the REs were charter members that hadprivileged membership based on their expertise and experience,which provided further confidence in the validity of the informa-tion obtained from the interviews.
The REs that were interviewed were 40.5 years old on average,with the youngest being 24 and the oldest being 54 years old(Table 1). Apart from five REs whose highest qualification was aBachelors degree, others had taken a Masters or PhD. 14 REs citedthe US as the primary foreign country where they had resided priorto the return to India, the other host countries in the sample beingCanada, UK, and Singapore. On average, the interviewees had livedabroad for 7.31 years, with a minimum stay of 0.75 years and amaximum of 14.5 years. On average, the REs had 7.27 years of priorwork experience abroad. Nine of the 20 REs were ‘Direct Returnees’that had directly returned to India to found a venture without firsttaking up employment with another company in India upon theirreturn. 11 were ‘Indirect Returnees’ or those that first returned asan employee of another company prior to starting up on their own.Apart from seven individuals who had returned in the mid-1990s,all the others had come back post 2000. Barring two REs who hadstarted their ventures in the late 1990s, all others had started upafter 2000, with as many as 15 REs having founded their venturesafter 2005. The REs were engaged in a range of industry sectors,especially services.
5. Findings
The REs in the sample cited personal motivations includingstrong family ties at home or the need to locate children inproximity to extended family in India as the key motivationunderlying their return to India. For Cases D and L, their returnhome was related to the desire to locate close to their parents. CaseL had a ‘natural tug’ for going back to his mother at a time when hisfather was ill. Push factors were not influential for him as the US,where he lived at the time, was not in recession and he hadenormous professional opportunity there. Cases D, I, J, L, and Owere concerned about raising children in a foreign environmentand hence desired to locate close to parents in India. As Case Iexplained, it was important to go to India as their close relatives inIndia could not afford to visit the US:
‘. . .in our case we wanted to come back more for the family. Andmainly because our kids were growing up, and the only familyin New York were the grandparents who could visit [fromIndia]. But their exposure to uncles, aunts, and the rest of thefamily was just not there. Nobody else can really afford to visitthe US. So that was our main motivation. . .’ [Case I].
Both opportunity and necessity-based reasons drive REs tocreate a venture. For Case Q, the underlying idea for the venture,that of developing a device for monitoring cash expenses, startedoff as a personal need. In contrast, Cases F, L, and M started a fewyears after their return, mainly due to serendipitous or push-basedfactors such as monetary dissatisfaction in their current employ-ment or lifestyle-based reasons such as the desire to reduce traveland stay close to the family. These REs had no intention to start up
reation by returnee entrepreneurs. International Business Review
Yes
No
Vali dation of idea
with strong
industry ties whils t
abr oad; Res ourc e
acquisition thr ough
strong in dustry ties
abr oad
No clear idea f or
ven ture prior to
return
Vali dation of ide a and
resourc e acqui sition
thr ough st rong famil y and
industry ties in I ndia, and
intermedi ary and weak ties
in India
Direct return
to India
Vali dation of ide a and
resourc e acqui sition
thr ough st rong famil y ties
in India, and in dustry ties
and int ermedi ary and weak
ties abr oad and in India
Vali dation of ide a thr ough
strong in dustry ties,
intermedi ary ties; Res ourc e
acqui sition thr ough st rong
famil y and industry ties,
intermedi ary and weak ties
in India
Int ention to start
ven ture pr ior to return
to India
Indire ct return to
India
Vali dation of ide a thr ough
intermedi ary and weak ties;
Res ourc e acqui sition
thr ough st rong family ties,
intermedi ary and weak ties
in India
Vali dation of ide a
with strong famil y
ties in Indi a whils t
abr oad
Direct return
to India
Indire ct return to
India
Clear idea f or ven ture prior
to return
Fig. 1. A structural categorization of the use of social ties in venture creation by REs in India
S. Pruthi / International Business Review xxx (2014) xxx–xxx6
G Model
IBR-1091; No. of Pages 14
prior to their return to India. Case M accidentally stumbled upon anopportunity in the area of skills assessment further to an informalmeeting with a close friend in India that drove him to study thetrends in this industry, whereas for Case F, it was the desire tospend more time with family that prompted him to quitemployment in India and start up in the pharmaceutical industry.For Case L, the process of starting up a research organization was
Table 2Role of social ties in venture creation by REs: summary.
REs Social ties
Direct REs
(Intention to start up and clear
idea for venture prior to
return; directly return
home to start up)
Strong family ties
Strong industry ties abroad
Strong industry ties at home
Intermediary and weak ties at home
Direct REs
(Intention to start up and
clear idea for venture prior
to return but no
strong industry ties
abroad; directly return
home to start up)
Strong family ties
Strong industry ties abroad
Strong industry ties at home
Intermediary and weak ties at home
Indirect REs
(Intention to start up but no clear
idea for venture prior to
return; return home
as employees of another
company prior to starting up)
Strong family ties
Strong industry ties abroad
Strong industry ties at home
Intermediary and weak ties abroad
Intermediary and weak ties at home
Indirect REs
(No intention to start up prior
to return; return home as
employees of another
company prior to starting up)
Strong family ties
Strong industry ties abroad
Strong industry ties at home
Intermediary and weak ties abroad
Intermediary and weak ties at home
Please cite this article in press as: Pruthi, S. Social ties and venture c(2014), http://dx.doi.org/10.1016/j.ibusrev.2014.03.012
initiated only after he realized his dissatisfaction with themonetary compensation he received at his former work organiza-tion.
The patterns in the data revealed that REs draw on local tiesdespite the availability of international ties developed abroad.However, REs are heterogeneous in the way they combineinternational and local social ties depending on the location of
Role of social ties in venture creation
Motivate return, provide resources upon return
Validate ideas prior to return despite the presence of strong family ties at home
Validate ideas, provide resources upon return despite the presence of strong
family ties
Further validate ideas, provide resources upon return beyond strong family/
industry ties abroad or at home
Motivate return, substitute for strong industry ties abroad to validate ideas
prior to return
Not available
Not available
Further validate ideas, provide resources upon return beyond strong family ties
Motivate return, provide resources upon return
Validate ideas, provide resources upon return despite the presence of strong
family ties
Validate ideas, provide resources upon return despite the presence of strong
family ties
Further validate ideas, provide resources upon return beyond strong family/
industry ties abroad or at home
Further validate ideas, provide resources upon return beyond strong family/
industry ties abroad or at home
Motivate return, provide resources upon return
Not available/not relevant
Validate ideas, provide resources upon return
Not available/not relevant
Further validate ideas, provide resources upon return beyond strong family/
industry ties at home
reation by returnee entrepreneurs. International Business Review
S. Pruthi / International Business Review xxx (2014) xxx–xxx 7
G Model
IBR-1091; No. of Pages 14
their intention to start-up and generation of idea. Fig. 1 provides astructural categorization of returnees’ social ties in venturecreation. Table 2 summarizes the role of social ties in venturecreation for REs. There were two groups of REs in the sampledepending on whether they intended to start up prior to or aftertheir return to India. The REs that intended to start up prior to theirreturn either had a clear idea for their venture before coming back,or did not have a definitive idea prior to return. Whereas the formergroup of REs were the ‘Direct Returnees’ that directly returned to
Table 3Role of social ties in venture creation by direct REs in India.
Returnee Validation of opportunity
prior to return to India
Return to India
Direct Returnees
(Clear idea and strong
non-family ties abroad
and at home)
Strong industry ties abroad Intrinsic motivatio
to return/strong
family ties in India
Case E -Prior experience of investing
family funds in UK gave
confidence to start up in
India; validated idea with
formal business friends in UK
-Always wanted
to come back to
start own business
Case O -Opportunity based on
understanding of gaps in
industry in India based on
prior work experience in UK
and interaction with work
colleagues in London
-Returned upon co
of studies in Londo
wanted to return t
Case P -Modified business plan from
earlier venture in US to suit
opportunity (incubation) in
India when former partner in
US introduced idea of
offshoring in India
-Returned to raise
family in India
Case T -Wanted to start venture
based on the same idea as
that for first company
in US, in India
-Always wanted to
come back to India
feel love for the co
Direct Returnees
(Clear idea but no
strong non-family ties
abroad or at home)
Strong family
ties in India
Intrinsic motivation to
return/strong family
ties in India
Case C -Sister in India did
market research
prior to return
-Longing for traditional
culture while in US;
returned to India to join
sister who moved there
couple of years ago
Case K -Validated idea with
family prior to return
to India
-Always wanted to
come back to do
something on own
Case Q -Perceived viability of
opportunity in India;
brother validated idea in US
-Wanted to come back
to family in India
Please cite this article in press as: Pruthi, S. Social ties and venture c(2014), http://dx.doi.org/10.1016/j.ibusrev.2014.03.012
India to start a venture, the latter first took up employment with alocal company in order to crystallize their general idea into a moreconcrete idea prior to starting up. These individuals were the‘Indirect Returnees’. The third sub-group of REs had no intention tostart up prior to their return also returned as ‘Indirect Returnees’ asthey first took up employment with a company and subsequentlyquit their job to start a venture based on an idea they generatedafter their return to India. This section presents the findings,followed by the propositions based on the empirical evidence.
Validation of
opportunity upon
return to India
Resource acquisition
upon return to India
n Strong industry
ties/Intermediary/
weak ties in India
Strong industry ties abroad
and in India, strong family
ties and intermediary/weak
ties in India
-Market research to
identify scalable
business with growth
opportunities in India
-Joint venture with largest
international security services
company in the world
-Family garage for office space in
India; family source of funds;
family connections for hires
in the security industry
-Recruited local people for
the job based on their skill set
mpletion
n; always
o India
– -Alumni in UK introduced to
business angels in Germany,
gave advice, and became
first customers
-Professor at Alma Mater in UK
for advice on hiring strategy
-Old friends, colleagues in India
for office, operational and
managerial assistance, specialized
skills and knowledge
-Parents, wife and kids
for emotional support
– -Professor in US on
board of company; Business
school alumni from US
as co-founder/partner
-Friends in India helped
connect with Indian investor
-Ancestral family house in
India for office
;
untry
-‘Sample studies’
to identify
needs of youth
in India
-Foreign company abroad
approached for merger; agreed
for merger to access
markets in Europe and China
-Local recruitment companies for
hiring local people
Intermediary/
weak ties in India
Strong family ties and
intermediary/weak ties in India
-Market research in India -Sister for her strength in
finance and technology to
match own strengths in color and design.
-Local apartment community
for people, marketing director;
local banks for finance
-Talked to people in ‘several
different local communities’
upon return to India before
selecting financial mortgage
services
-Family for finance, office space
-Market research in India -Father for connections to
local market, bank finance
-Grant from local government body
reation by returnee entrepreneurs. International Business Review
S. Pruthi / International Business Review xxx (2014) xxx–xxx8
G Model
IBR-1091; No. of Pages 14
5.1. Intention to start up and clear idea for venture prior to return
Cases E, O, P and T, that had intention to start up and clear ideafor their venture prior to their return, used strong industry ties thatthey had cultivated abroad for validating the idea prior to theirreturn to India. They further validated the opportunity throughintermediary or weak industry or personal ties in India and alsodrew on strong family and industry ties, and intermediary andweak ties in India for acquiring finance, customers or advice fortheir ventures (Table 3).
Case P first set up an e-learning business with his businesspartners in the US and an off-shore arm for developing software forthis business in India. He subsequently used this office to start hisown venture in the area of incubation when he returned to India.He continued to leverage close relationships with academicadvisors and business partners in the US even as the availabilityof physical infrastructure in the form of his ancestral family housein India enabled him to relatively easily set up in India. Similarly,Case O, who had lived in the UK, cultivated strong industry ties inthe UK when he first went there to study. Case O reiterated that hewent to study in the UK with the sole objective to network withother people. However, the course that he took changed histhinking about setting up a business and helped him develop aninternational market orientation. The close friendships he culti-vated during his advanced degree program helped him validate hisidea and even led him to his first business client and angelinvestment from Germany. Case O also had several close friendsand former colleagues in India based on his local work experiencethat set up his office in the early stages, took calls frominternational clients and even helped in recruiting key personnelfor his office when he first returned to India to start up:
‘XXX was my study mate [in UK] so we used to discuss a lot ofbusiness ideas. . .he used to also discuss trying to raisemoney. . .in one particular conversation he asked me to get intouch with these two people. . . I definitely tapped my oldcolleagues in my previous company and my colleagues in theindustry [in India]. . .. I think it helped a lot. . . my friend workingin some company, took a call. . .so I think my network has reallysupported me’ [Case O].
In contrast, Cases C, K, and Q relied on strong family ties in India tovalidate the idea prior to their return (Table 3). These REs drew theinspiration to start-up from a range of intermediary ties such asindustry exhibitions, networking organizations and even academicinstitutions that they had attended during their stay abroad, however,they perceived it more feasible to set up in India in view of the lack ofrelevant industry contacts abroad or the need for complementaryskills based in the family. They validated their idea with closemembers of the family in India prior to their return. Subsequently,they drew on intermediary ties such as market research agencies orweak ties such as members of the local community in India to furthervalidate the opportunity, and strong family, intermediary and weakties to acquire resources for their venture.
For Case Q, the underlying idea for the venture, that ofdeveloping a device for monitoring cash expenses, started off as apersonal need whilst he was in the US. The electronics exhibition inGermany that he had attended as part of his work assignmentabroad was a key source of inspiration to start up. He also recalledhow his international experience exposed him to ‘a range of issues’and ‘opened up’ the mind. However, there were difficulties inimplementing his idea in the US as the product was less appealingfor the US market given the reliance on card transactions. Theenvironment at the company where he worked was also notperceived to be encouraging. He felt he could not incorporate acompany without any contacts in the US. It was also difficult to
Please cite this article in press as: Pruthi, S. Social ties and venture c(2014), http://dx.doi.org/10.1016/j.ibusrev.2014.03.012
continue to live in the US after giving up his employment.Therefore, after initially talking to his brother for validating theopportunity, he undertook additional market research in Indiathrough another member of the family prior to his return andsubsequently, he drew on his father’s personal funds and contactsin the banking industry in India for the acquisition of financialresources upon his return home:
‘. . .I had no contacts in the US, how to get started, what do I do? Icouldn’t incorporate the company in the US without having toknow people. . . he [dad in India] has a lot of connections in thebank. . .we applied for a loan from the bank and it has helped usout. My dad has also invested and put in some money as well’[Case Q].
Coming from an arts background, Case C first tried to findtraditional Indian crafts for her children in the US, and this gap inthe market motivated her to set up her own venture. After a priorunsuccessful attempt to found a venture in the US, she thoughtabout a business opportunity in the area of arts and crafts but wasunable to operationalize it as ‘there was need to go beyond it’. Sheeventually co-founded her venture with her sister, a companysecretary in India, who did the market research to validate theopportunity in India. Henceforth, she planned the move to Indiaover a five-year horizon. Case C emphasized that her sister in Indiahelped her convert the idea into an opportunity through marketresearch on the ground before Case C returned to India. Thisarrangement also allowed her to complement her creative skillswith her sister’s financial and technical skills. She also consultedwith a cousin in India for her expertise in finance andentrepreneurship prior to approaching external agencies such aslocal banks in India for financial resources:
‘. . .we talked about it a lot when we were there. With my sisterhere [in India] so she would do all the research here as to what’srelevant and what’s not and then it made sense to come backand do this’ [Case C].
The above evidence leads to the following propositions:
Proposition 1a. REs that have a clear idea for their venture prior to
their return will combine strong industry ties abroad with strong
industry ties and intermediary and weak industry or non-industry ties
at home for validating the idea for their venture.
Proposition 1b. REs that have a clear idea for their venture prior to
their return will combine strong industry ties abroad with strong
family ties, strong industry ties, and intermediary and weak industry
or non-industry ties at home for acquiring resources for their venture.
Proposition 1c. REs that have a clear idea for their venture prior to
their return will substitute strong family ties at home in the absence of
strong industry ties abroad to complement intermediary and weak
industry or non-industry ties at home for validating the idea for their
venture.
Proposition 1d. REs that have a clear idea for their venture prior to
their return will substitute strong family ties at home in the absence of
strong industry ties abroad or at home to complement intermediary
and weak industry or non-industry ties at home for acquiring
resources for their venture.
5.2. Intention to start up but no clear idea prior to return
The REs that had no clear idea prior to their return first returnedto India as employees of another company (Table 4). For these REs,the prior experience of working and handling significant respon-
reation by returnee entrepreneurs. International Business Review
Table 4Role of social ties in venture creation by Indirect REs with intention to start up but no clear idea prior to return to India.
Returnee Return to India Idea generation and validation of
opportunity upon return to India
Resource acquisition upon return
to India
Indirect Returnees Intrinsic motivation to
return/strong
family ties in India
Strong family and industry ties abroad
and in India; intermediary and weak
ties abroad and in India
Strong family and industry ties abroad
and in India; intermediary and weak
ties abroad and in India
Case A -Returned to India after completion of
fellowship; purpose was to come back
to India
-Introduced to advisor in Montreal for
validating product idea
-Entered local and international
competitions in India after piloting
product; met with industry expert in
education at airport who helped
identify gap in market
-Personal contacts abroad for
international expansion
-University professors in India guided
product development
-Foreign universities for grant for
product development
-Met with co-founder at airport;
customers for introduction to co-
founder; National Entrepreneurial
Network at University for finance, legal
assistance and contacts; local business
plan competition for access to mentor/
co-founder
Case B -Returned to India after completion of
work assignment abroad
-Perceived feasibility of capitalizing on
opportunity in IT sector in India; former
work colleague helped identify gap in
market
-Former work colleagues as co-
founders; co-founders for first
customers; former company for first
customers
-Dad for office space
Case D -Strong sense of family and belonging
to India
Local work experience for validation
-Advisors in the US were sounding
board for thought process; helped
sound out idea
-Personal relationships with industry
contacts, former colleagues in the US
for first customers, advice
-Colleague at former organization
became co-founder; close friends, who
are vice presidents in India for finance,
advice
Case G -Returned to India after work stint at
UK office of Indian company; emotional
bonding with India
-Former client in UK reaffirmed need
for services in India
-Prior work experience in the UK led to
first client
-Colleague from prior start-up in India
joined up for current venture
Case H -Wanted children to grow up in India -Friends in US a source of inspiration
-Large company where worked in India
prior to start up gave ‘soft landing’ to
experiment with ideas; identification of
opportunity in energy sector based on
local work experience with this
company
-Former workplace for people
-Wife gave emotional support
-Local networking organization for
contact to VC, information, advice; VC
helped find recruits; enrolled for
management program in India to
develop business skills; local
companies for local managers
Case I -Came back to bring children to
grandparents
-Strong, non-family ties abroad -US
Website for national transportation to
find out about upcoming areas.
-Friends, former colleagues who have
started companies to validate idea
-Confidence to start company through
networking organization in India
-Consulted with friends and former
colleagues abroad
-Former work colleagues for advice,
people; other companies for people
-Moved into apartment community to
connect with other people
Case J -Came back as kids were growing up;
missed grandparents in New York; kids’
exposure to uncles, aunts, and rest of
the family in India was missing
-Came back as expatriate of US-based
company; decided to replicate idea of
‘reverse logistics’ in India based on local
work experience at company
-Former colleagues and friends in the
US came on board as advisors
-Local VC in India through networking
organization
Case N -Always desired to come back to India -Experience at large company in India
gave time and confidence to start up
-Friends and former colleagues abroad
for advice
-Sister in India as co-founder; friend’s
son as trainee
Case R -Wanted children to learn local culture,
grow up closer to grandparents in India
-External agencies in US validated
demand for the product
-Opening up of markets in India a signal
of demand for product; industry
knowledge based on prior work
experience helped identify market gaps
in India; reading to develop knowledge
about product market in India;
attending local conferences to develop
product features
-Close friends from US helped settle
down in India, gave advice about
developing and selling product
-Father-in-law’s help for access to
office, legal services, accountants
Case S -Intrinsic motivation to return to India -Weak ties in India Friend for office space, international
marketing advice
S. Pruthi / International Business Review xxx (2014) xxx–xxx 9
G Model
IBR-1091; No. of Pages 14
sibility at their former workplace abroad inspired them toindependently found a venture upon returning to India. However,they returned as employees of a company in order to get an insightinto the local work culture, get a ‘soft landing’ or ‘build muscle’prior to starting up on their own. The local work experience
Please cite this article in press as: Pruthi, S. Social ties and venture c(2014), http://dx.doi.org/10.1016/j.ibusrev.2014.03.012
enabled them to crystallize their idea. These REs sought to applytheir international experience or expertise to their venture, andtypically targeted the international market in the event it werepossible to return to the US if the market in India did not take off.They leveraged strong industry ties such as those with advisors,
reation by returnee entrepreneurs. International Business Review
S. Pruthi / International Business Review xxx (2014) xxx–xxx10
G Model
IBR-1091; No. of Pages 14
investors or partners abroad to validate the idea or form strategicalliances, while relationships with friends and former colleagues inIndia provided physical infrastructure or local personnel for theirventures. In some cases, intermediary ties, such as externalagencies abroad, also helped validate ideas whereas localnetworking organizations reinforced confidence or even providednecessary resources.
Case I initially worked for another start-up as member oftechnical staff upon his return to India. This experience gave himan insight into the work culture, especially as he worked withseveral returnees in the team. He stayed there for 18 months beforemoving out to start his own company. The ‘soft landing’ gave CaseH some time to experiment with his ideas and finalize his businessplan, whereas for Case D, it was important to ‘build muscle’through local work experience and acquire an understanding of the‘real problems to solve’ prior to implementing his ideas. In all suchcases, the REs knew that their work stint as an employee wastemporary until the point at which they identified the specificproblem they wanted to solve.
Cases D and I used strong industry ties abroad for validatingideas. Case D used advisors in the US, also with a view to seekingfunding from them in the later stages. Case I, browsed the USwebsite for national transportation, an area where he had workedin the US, to search for upcoming ideas. He first thought about howto use the internet for his venture in the US. Then he spoke with oneof his friends in India upon his return, to validate the idea, andseveral friends and ex-colleagues in the US.
Cases D, H and I reiterated that the organization where theyworked upon their return to India was also important for theacquisition of local people to connect with the Indian market. AsCase I noted, it was rather difficult to convince people to workfor a start-up, which is where prior work experience in India wasvery useful. This group of returnees also drew on a moreextensive set of intermediary and weak industry and non-industry ties from abroad and in India, for validating the productor service idea, or even obtaining resources for their ventures,
Table 5Role of networks in venture creation by indirect REs with no intention to start up prio
Returnee Return to India Idea generation and va
upon return to India
Indirect
Returnees
Strong family ties in India/intrinsic motivation
to return
Strong industry ties, fam
and weak ties in India
Case F -Wanted children to grow up in India, to
understand extended family in India
-Decided to start up du
generated idea based on
medicines at close frien
validated opportunity
-Market research to loo
technology, dot.com, ho
observed unhygienic co
pharmacy to decide on
Case L -Always wanted to come back to India -Decided to start up aft
current employment; fo
to World Bank, large M
-Economists in India ‘o
gave projects
Case M -Returned to India upon completion of
assignment abroad; always wanted to
come back
-Close friend in India m
for online assessments,
-Validated idea with cl
-Perception of window
outsourcing and assess
opportunity for skills a
Please cite this article in press as: Pruthi, S. Social ties and venture c(2014), http://dx.doi.org/10.1016/j.ibusrev.2014.03.012
beyond drawing the inspiration to start up. For Cases H and I,extensive intermediary and weak ties in India included chanceencounters with individuals that identified a valid problem andlater became co-founders, to large organizations that the REsreached out to acquire business acumen, verify their idea oreven acquire financial resources. Case H, for instance, enrolledhimself for an executive education program in India to acquirean understanding of business issues. Case I approached a localfunding body after being refused by a formal VC, while localnetworking organizations actually gave him the confidence tostart up. Case R also drew on external agencies in the US forvalidating her product idea. Although confident of her ability tofind a market in India, she felt she could leverage her experiencein the US to develop a product for the US market in the event theIndia market was not available:
‘. . .I’m talking about the advisors, advisors plus what we didwas we even got our first contracts with US companieswhich. . .were based on our earlier relationships that we’dhad with them. . .and we knew that if you wanted to go forwardwe needed very strongly a few US organizations to look at uspositively’ [Case D].
‘. . .I was looking at the website for national transportation inthe US. . .to find out about upcoming areas. . .. And then I had anidea how would we use it, and I wrote down that idea and talked tomy ex-colleagues, my friends who have started companies. . .’[Case I].
‘. . .So my first choice was to see if I could find a market in India,but I also knew at the back of my mind that if I wasn’t able to find amarket in India that I’d be able to go and find one outside India. . .’[Case R].
Hence the following propositions:
Proposition 2a. REs that have an intention to start up but no
clear idea prior to their return will combine strong industry, and
intermediary and weak industry and non-industry ties abroad with
r to return to India.
lidation of opportunity Resource acquisition upon return to India
ily ties, and intermediary Strong industry ties, family ties, and interme-
diary and weak ties in India
e to lifestyle-based reasons;
close observation of dispensing
d’s hospital in India; close friend
k at various opportunities in
spitals, pharmaceutical retail;
nditions at friend’s local
this sector for start-up
-Mostly hired local people in IT/marketing
based on previous relationships at the
workplace in India
er monetary dissatisfaction with
rmer colleague in India referred
NC for projects
utside of the immediate network’
-Networks abroad not useful, referral through
friend for first key employee
-Wife for emotional support; brother referred
to someone for renting office space
-Hired engineers from local institute to train
to carry out econometric analysis; large
development organizations in India as first
clients
entioned gaps in market space
validated opportunity
ose friend
of opportunity in India; studied
ment trends to validate
ssessment in India
-Alumni network for co-founders; board
members; referrals to customers
-Cousin who is a professor in India helped
design assessments
-Approached famous local columnist to join
board for advice and credibility; attended
conferences for board members; co-
passengers on train for new recruits;
chartered accountants, client’s office for
meeting with/referrals to angel investors
reation by returnee entrepreneurs. International Business Review
S. Pruthi / International Business Review xxx (2014) xxx–xxx 11
G Model
IBR-1091; No. of Pages 14
strong family ties, strong industry ties, and intermediary and weak
industry and non-industry ties at home for validating the idea for their
venture.
Proposition 2b. REs that have an intention to start up but no clear
idea prior to their return will combine strong industry, and intermediary
and weak industry and non-industry ties abroad with strong family ties,
strong industry ties, and intermediary and weak industry and non-
industry ties at home for acquiring resources for their venture.
5.3. No intention to start up prior to return
Cases F, L, and M also first entered India as employees ofcompanies, but they did not intend to start up prior to their return(Table 5). They typically started up a few years after their return,mainly due to serendipitous or push-based factors such asmonetary dissatisfaction in their current employment or life-style-based reasons such as the desire to reduce travel and stayclose to the family. In addition to family ties, these REs extensivelyleveraged close relationships with colleagues or bureaucrats thatthey had cultivated during their period of work in India, after theirreturn from abroad.
Case M had ‘no networks built abroad’ whereas Cases F and Lexplained that they had built personal ties in various foreigncountries where they had lived prior to their return to India,however, the ties they most usefully leveraged were those withfriends and former colleagues based on local work experience inIndia. They found it hard to leverage their contacts abroad that weremuch less relevant for a local venture in India. What was valuable,instead, was the confidence and credibility of being a ‘returnee’acquired from being abroad. Also useful in some cases were referralsfrom family or former colleagues in India to individuals or agenciesthat provided rental space or introductions to customers. Thefollowing quotes from Cases L and M are illustrative:
‘And in fact when they [contacts abroad] did [help] err, it tookmore of a toll. . .it just so happened that they actually wantedsomething more than trying to help me out. So that didn’t help.And in fact today I advise people. . .it’s the worst thing you cando. . . .Once you have some sort of a brand as I say with you, thenit becomes easier. And the brand is US returned’ [Case L].
‘On route on the train I happened to meet a family. . .startedchatting up and realized that there was a girl in the family. . .shehad just graduated. . .she said I’m bored, I’ve nothing to do, and Isaid why don’t you work for us. We are a start-up we need somehelp in Bombay. Can you help us out?’ [Case M].
This evidence suggests the following propositions:
Proposition 3a. REs that have no intention to start a venture prior to
their return home will combine strong family ties, strong industry ties,
and intermediary and weak industry and non-industry ties at home for
validating the idea for their venture.
Proposition 3b. REs that have no intention to start a venture prior to
their return home will combine strong family ties, strong industry ties,
and intermediary and weak industry and non-industry ties at home for
acquiring resources for their venture.
6. Discussion
Unlike prior studies on REs (e.g. Liu et al., 2010) which claim thatthe social capital that returnees possess is entirely fungible, thefindings of this paper show that local ties are indispensable forventure creation by REs despite the availability of international ties
Please cite this article in press as: Pruthi, S. Social ties and venture c(2014), http://dx.doi.org/10.1016/j.ibusrev.2014.03.012
developed abroad. REs draw on strong family ties at home to initiatethe return home or validate ideas, even prior to their return in somecases, thus enhancing the perceived feasibility of returning home tostart up (DeCarolis, Litzky, & Eddleston, 2009). Subsequently, localties including strong industry ties, and intermediary and weak ties,are vital for access to local employees, customers, or market-specificknowledge either in addition to the international ties developedabroad or because international ties are no longer relevant forventure creation at home. Social ties are known to play an importantrole in the conduct of business in emerging economies wherecontract law and property rights are not well established (Ellis,2000). The findings of this paper show that local ties are necessaryfor venture creation by REs in a context where formal institutionalsupport for entrepreneurial activity is thin. These findings contrib-ute to the IE literature on emerging economies. As Parthasarathy andAoyama (2006) note, globally connected business relations,previously based on backward and forward linkages with largemultinational corporations, are becoming increasingly groundedand localized in India in recent years due to growing ‘institutionalthickness’ or the emergence of informal networks among local firmsand organizations, especially in knowledge-intensive sectors.Several professional organizations, some of them formerly regula-tory institutions, have also emerged to complement informalnetworks for promoting innovative activity.
In demonstrating the utility and function of both strong and weakties in venture creation by REs, the findings also add to prior studiesthat have examined the structure of social networks in a singlegeographic setting. The role of strong family ties for pulling REshome and providing initial access to resources is consistent withprior evidence on knowledge-intensive small firms in the IEliterature (Chung & Tung, 2013), and new ventures in theentrepreneurship literature where strong family ties are alsoreferred to as ‘resource feeders and seekers’, or bridges to weakties (Jack, 2005). REs are also akin to other entrepreneurs thatleverage prior career experiences (Dahl & Pedersen, 2004) to bringbroader functional networks to their ventures through strongindustry ties or draw on an extensive range of intermediary andweak ties beyond strong ties, especially in the initial stages ofventure creation (Sullivan & Ford, 2014). In addition, the findings ofthis paper illustrate how REs combine strong and weak ties acrossgeographic locations for validating ideas and acquiring resources fortheir ventures. The findings also show that REs draw on strongindustry ties despite the availability of strong family ties, however,they substitute strong family ties for strong industry ties when thelatter are unavailable. These findings also extend the literature onsocial networks.
A novel contribution of this study is that the heterogeneity inthe way REs combine social ties across their host and homecountries is contingent on the location of their intention to start-upand generation of idea. In the parlance of effectuation theory(Sarasvathy, 2001), these findings show how the proactivebehavior of REs in leveraging their social ties forms the basis ofentrepreneurial action in the uncertain situation of returning homeand even lack of clarity of ideas or generalized intention to start upin some cases. REs’ prior experiences and understanding of theirsocial ties, rather than traditional planning activities, shapeventure creation in these circumstances. REs leverage a varietyof ties with family, business partners, customers, advisors orexternal organizations and combine them in different ways acrosstheir host and home countries to test markets or maintainflexibility without themselves owning all necessary resources(Chandler et al., 2011). Those that do not have a clear idea prior toreturn and first take up local employment, for example, build localties to solidify their idea and understand the local market. At thesame time, they also draw on international ties abroad in additionto local ties to validate the idea or acquire international partners or
reation by returnee entrepreneurs. International Business Review
S. Pruthi / International Business Review xxx (2014) xxx–xxx12
G Model
IBR-1091; No. of Pages 14
customers in case the local market does not take off. Thesubstitution of strong family ties where strong industry ties areunavailable for validation or acquisition of complementaryresources even when the idea underlying the venture is definedmay similarly be interpreted as an emergent strategy where thefocus is on making the most with the available set of ties(Sarasvathy, 2001).
Although social networks constitute an important sub-dimen-sion of effectuation (Read et al., 2010; Sarasvathy, 2001), little isknown about how decision makers use their social networks and thesocial capital that they bring to shape opportunities in a situation ofuncertainty. Recent empirical evidence related to effectuation in theIE literature is focused on the rapid internationalization of bornglobal firms (e.g. Andersson, 2011). In understanding the way REscombine different types of social ties in venture creation, this paperadds to the IE literature. However, as Chandler et al. (2011) notes,although different in underlying motivations, the use of networkcontacts is common to both effectuation and causation processes.Therefore, further research is needed to develop a more holisticunderstanding of the perceptions and decision making of REs basedon a broader set of given means such as their personal characteristicsor knowledge, in addition to social ties, before starting up. Such effortmay also respond to the call to sample a wider variety ofentrepreneurs for advancing effectuation-based research (Perry,Chandler, & Markova, 2012).
The evidence in this paper shows a link between REs’ use ofinternational social ties developed abroad and internationalmarket orientation. Although these findings are in line with priorresearch which shows that REs’ prior work experience positivelyaffects export propensity and export performance of their venturesonly when they have global networks (Filatotchev et al., 2009),further research is needed to examine this link. Does internationalorientation influence or is influenced by social ties developedabroad as REs create new ventures? And is the performance ofventures created by REs that leverage social ties from abroaddifferent from those that do not leverage these ties? It may also beworthwhile investigating whether the REs that leverage interna-tional social ties formed abroad are more likely to behave as TEsafter their return home compared to those that do not leveragethese ties and hence may be ‘clean break’ returnees (Wright et al.,2008). An understanding of these issues may be useful foridentifying returnees whose ventures have international potential,especially in emerging economies.
The finding about returnees’ strong industry ties based on priorwork experience also reinforces the role of entrepreneurs’ humancapital, in particular the location of prior work experience, for thedevelopment of social capital (Anderson & Miller, 2003; Chandler &Hanks, 1998; Davidsson & Honig, 2003). These results extend extantresearch on the heterogeneity of entrepreneurs based on priorentrepreneurial experience (Westhead & Wright, 1998). Futureresearch may undertake a comparative analysis of REs based on theimpact of the length of their work experience abroad or at home onthe development of these ties. The insights from the interviews alsorevealed that REs who validate ideas with family members prior totheir return often draw on them as members of their team, whereasthose that validate ideas with former colleagues abroad or at hometeam up with them for their ventures. Therefore, the nature andcomposition of teams in ventures created by REs is a fertile area forfurther research (Aldrich & Kim, 2007; Ucbasaran, Lockett, Wright, &Westhead, 2003).
For policy, the analysis redirects attention to micro-levelmeasures, in particular social ties, for the development ofentrepreneurship in emerging economies (Goldfarb and Henrek-son, 2003). Specifically, policy may target the creation ofappropriate social ties based on the location of returnee’s recentwork experience or mode of return rather than treat them as a
Please cite this article in press as: Pruthi, S. Social ties and venture c(2014), http://dx.doi.org/10.1016/j.ibusrev.2014.03.012
homogeneous group. For REs that directly return home to start up,policy may facilitate their interface with local market researchagencies in order to expedite the process of venture creation.Public agencies also need to identify potential entrepreneurs fromthe population of individuals that first return home as employeesof other companies. Potential employers may be encouraged tooffer employment to returnees and facilitate their transition intoentrepreneurship based on their interface with colleagues at thework place. Local networking organizations outside of thesereturnees’ immediate place of work may be developed to boosttheir confidence to start up or build further links with local venturecapitalists, customers or employees, beyond those availablethrough strong industry ties.
For returnees, the findings suggest that they can leverage theirsocial ties to create a new venture. However, they must develop localties irrespective of the availability of international ties developedabroad. Individuals that have a clear idea prior to their return maydirectly come back home to start up after validating it with strongindustry ties, although they may substitute strong family ties forstrong industry ties where the latter are unavailable. Those that donot have a concrete idea or even an intention to start up prior to theirreturn may still be able to start up if they first return as employees ofcompanies and build strong industry ties at home that they canusefully combine with strong family, and intermediary and weakties should they decide to venture on their own. Individuals thatreturn home with a general idea or even an intention to start up mayfind it useful to leverage their international ties in addition to localties that they cultivate at home as they validate their idea or acquirenecessary resources for their venture.
7. Conclusions
Returnee entrepreneurship is a phenomenon of significantinterest in emerging economies such as China and India. Althoughresearch has examined the role of returnees for the development ofindigenous entrepreneurship (Liu et al., 2010) or their locationchoice at science parks (Wright et al., 2008), this study is first toexamine the social ties of REs. The findings suggest that social tiesenable venture creation by REs in the uncertain situation ofreturning home. Local ties at home are indispensable for venturecreation by REs, however, there is no unique recipe for venturecreation. The novel contribution of this paper is that it shows theheterogeneity in the way REs leverage social ties across their hostand home countries is contingent on the location of their intentionto start-up and generation of idea. These findings contribute to theIE literature on REs. They also add to prior studies that haveexamined the structure of social networks in a single geographicsetting and extend the IE literature on emerging economies.Hoskisson et al. (2013) note that apparently similar emergingmarket contexts differ in the level of institutional, and infrastruc-ture and factor market development. These differences haveimplications for the extent to which the findings of this study canbe generalized to other countries beyond India. While India issimilar to other mid-range emerging economies such as Poland, forexample, it is different from others such as China or countries inthe Soviet Bloc that have relatively well-endowed infrastructure.As noted above, countries such as China also offer more supportinstitutional support for returnee activity compared to India.Therefore, it is important to replicate this study and ascertain thatthe findings hold true in these economies. A combination of aqualitative approach with a questionnaire survey may help both totheorize and test the effects of different contexts outside India.
Despite several contributions, this study has some limitations.First, this study is limited to an analysis of the strength ofreturnees’ ties. Other network aspects such as network size,centrality, diversity or density may be usefully considered in future
reation by returnee entrepreneurs. International Business Review
S. Pruthi / International Business Review xxx (2014) xxx–xxx 13
G Model
IBR-1091; No. of Pages 14
research. Second, the insights in this paper are based on qualitativeinterviews. Future work may extend the propositions developedhere to formulate testable hypotheses through a quantitativequestionnaire survey. Although the difficulties in identifying REssimply from their profiles in directories have been noted, thenetworking organization, The Indus Entrepreneurs (TiE), mayprovide a useful starting point for identifying the necessary sampleframe. Third, the paper adopts a structural approach to the study ofreturnees’ networks. The structural approach implies that entre-preneurs in diverse cultural settings use their social relations insimilar ways to access resources (Greve & Salaff, 2003). Futurestudies may explore the relationship between REs’ social ties andcultural or cognitive characteristics. Finally, as the REs in thesample had already started new ventures, they were asked to recallretrospectively the process through which they created theirventures. Even though 15 of the 20 REs in the sample had startedup post 2005 and can be expected to be accurate in theirrecollection, additional understanding of the venture creationprocess may be gained through the collection of prospective databy asking REs to describe it as it actually unfolds rather than as theylater recall it.
Acknowledgements
Financial assistance from the Research Innovation Fund (RIF) atthe Department of Management, King’s College London, isgratefully acknowledged. I am also thankful to Mike Wright, IgorFilatotchev, Matt Vidal, Meyyappan Narayanan and Sam Ayree, andparticipants at the 2011 ISBE Conference (Sheffield, UK) and 2012Academy of Management (AOM) Conference (Boston, USA) forfeedback on earlier versions of this paper. The constructivecomments of two anonymous reviewers were most valuable forimproving the paper.
References
Adler, P. S., & Kwon, S. W. (2002). Social capital: Prospects for a new concept. Academyof Management Review, 27(1), 17–40.
Aldrich, H. E., & Kim, P. H. (2007). Small worlds, infinite possibilities? How socialnetworks affect entrepreneurial team formation and search. Strategic Entre-preneurship Journal, 1, 147–165.
Aldrich, H. E., & Zimmer, C. (1986). Entrepreneurship through social networks. In D.Sexton & R. Smilor (Eds.), The art and science of entrepreneurship. New York:Ballinger.
Anderson, A. R., & Miller, C. J. (2003). ‘‘Class matters’’: Human and social capital in theentrepreneurial process. Journal of Socio-Economics, 32, 17–36.
Andersson, S. (2011). International entrepreneurship, born globals and the theory ofeffectuation. Journal of Small Business and Enterprise Development, 18(3), 627–643.
Bachkaniwala, D., Wright, M., & Ram, M. (2001). Succession in South Asian familybusinesses in the UK. International Small Business Journal, 19, 15–27.
Bagwell, S. (2007). Transnational family networks and ethnic minority businessdevelopment. International Journal of Entrepreneurial Behaviour & Research,14(6), 377–394.
Bandura, A. (2001). Social cognitive theory: An agentic perspective. Annual Review ofPsychology, 52, 1–26.
Banerjee, B. (1983). Social networks in the migration process: Empirical evidence onchain migration in India. The Journal of Developing Areas, 17, 185–196.
Basu, A., & Altinay, E. (2002). The interaction between culture and entrepreneurship inLondon’s businesses. International Small Business Journal, 20(4), 371–393.
Birtchnell, T. (2011). Jugaad as systemic risk and disruptive innovation in India.Contemporary South Asia, 19(4), 357–372.
Bruton, G. D., Ahlstrom, D., & Wan, J. C. C. (2003). Turnaround in East Asian firms:Evidence from ethnic overseas Chinese communities. Strategic Management Jour-nal, 24(6), 519–540.
Bruton, G. D., Ahlstrom, D., & Obloj, K. (2008, January). Entrepreneurship in emergingeconomies: Where are we today and where should the research go in the future.Entrepreneurship Theory and Practice, 32(1), 1–14.
Cavusgil, S. T., Ghauri, P. N., & Akcal, A. A. (2013). Doing business in emerging markets.London: Sage.
Chandler, G., & Hanks, S. (1998). An examination of the substitutability of founder’sfinancial and human capital in emerging business ventures. Journal of BusinessVenturing, 13, 353–369.
Chandler, G. N., DeTienne, D. R., McKelvie, A., & Mumford, T. V. (2011). Causation andeffectuation processes: A validation study. Journal of Business Venturing, 26, 375–390.
Please cite this article in press as: Pruthi, S. Social ties and venture c(2014), http://dx.doi.org/10.1016/j.ibusrev.2014.03.012
Chandra, Y., Styles, C., & Wilkinson, I. (2013). The recognition of first time internationalentrepreneurial opportunities: Evidence from firms in knowledge-based indus-tries. International Marketing Review, 26(1), 30–61.
Chen, W., & Tan, J. (2009, September). Understanding transnational entrepreneurshipthrough a network lens: Theoretical and methodological considerations. Entre-preneurship Theory and Practice, 33(5), 1079–1091.
Chetty, S., & Agndal, H. (2007). Social capital and its influence on changes in interna-tionalization mode among small and medium-sized enterprises. Journal of Inter-national Marketing, 15(1), 1–29.
Chung, H. F. L., & Tung, R. L. (2013). Immigrant social networks and foreign entry:Australia and New Zealand firms in the European Union and Greater China.International Business Review, 22, 18–31.
Coviello, N. (2006). The network dynamics of international new ventures. Journal ofInternational Business Studies, 37, 713–731.
Creswell, J. W. (2003). Research design: Qualitative, quantitative and mixed methodapproaches (2nd ed.). London: Sage Publications Inc.
D’Costa, A. P. (2004). Globalization, development, and mobility of technical talent (Re-search paper no. 2004/62). World institute for development economics research(WIDER) United Nations University.
Dahl, M. S., & Pedersen, C. O. R. (2004). Knowledge flows through informal contacts inindustrial clusters: Myth or reality? Research Policy, 33, 1673–1686.
Davidsson, P., & Honig, B. (2003). The role of social and human capital among nascententrepreneurs. Journal of Business Venturing, 18, 301–331.
DeCarolis, D. M., Litzky, B. E., & Eddleston, K. A. (2009). Why social networks enhancethe progress of new venture creation: The influence of social capital and cognition.Entrepreneurship Theory and Practice, 33(2), 527–545.
Dossani, R., & Kenney, M. (2002). Creating an environment for venture capital in India.World Development, 30(2), 227–253.
Drori, I., Honig, B., & Wright, M. (2009). Transnational entrepreneurship: An emergentfield of study. Entrepreneurship Theory and Practice, 33(5), 1001–1022.
Eisenhardt, K. M., & Graebner, M. E. (2007). Theory building from cases: Opportunitiesand challenges. Academy of Management Journal, 50(1), 25–32.
Elfring, T., & Hulsink, W. (2003). Networks in entrepreneurship: The case of hightechnology firms. Small Business Economics, 21, 409–422.
Elfring, T., & Hulsink, W. (2007, December). Networking by entrepreneurs: Patterns oftie-formation in emerging organizations. Organization Studies, 28(12), 1849–1872.
Ellis, P. (2000). Social ties and foreign market entry. Journal of International BusinessStudies, 31(3), 443–469.
Filatotchev, I., Liu, X., Buck, T., & Wright, M. (2009, February). The export orientationand export performance of high-tech SMEs in emerging markets: The effects ofknowledge transfer by returnee entrepreneurs. Journal of International BusinessStudies, 40, 1005–1021.
Goldfarb, B., & Henrekson, M. (2003). Bottom-up versus top-down policies towardsthe commercialization of university intellectual property. Research Policy, 32, 639–658.
Granovetter, M. (1973). The strength of weak ties. American Journal of Sociology, 78(6),1360–1380.
Greve, A., & Salaff, J. W. (2003). Social networks and entrepreneurship. EntrepreneurshipTheory and Practice, 28(1), 1–22.
Han, M. (2006). Developing social capital to achieve superior internationalization: Aconceptual model. Journal of International Entrepreneurship, 4, 99–112.
Hoang, H., & Antoncic, B. (2003). Network-based research in entrepreneurship: Acritical review. Journal of Business Venturing, 18, 165–187.
Hoskisson, R., Wright, M., Filatotchev, I., & Peng, M. (2013, November). Emergingmultinationals from mid-range economies: The influence of institutions and factormarkets. Journal of Management Studies, 50(7), 1296–1320.
Huber, G. P., & Power, D. J. (1985). Retrospective reports of strategy-level managers:Guidelines for increasing their accuracy. Strategic Management Journal, 6(2), 171–180.
Jack, S. (2005). The role, use and activation of strong and weak network ties: Aqualitative analysis. Journal of Management Studies, 42(6), 1234–1259.
Kiss, A. N., Danis, W. M., & Cavusgil, S. T. (2012). International entrepreneurshipresearch in emerging economies: A critical review and research agenda. Journalof Business Venturing, 27(2), 266–290.
Kontinen, T., & Ojala, A. (2011). Network ties in the international opportunity recogni-tion of family SMEs. International Business Review, 20(4), 440–453.
La Porta, R., Lopez-De-Silanes, F., Shleifer, A., & Vishny, R. W. (1998). Legal determinantsof external finance. The Journal of Finance, LII(3), 1131–1150.
Light, I. H., & Gold, S. J. (2000). Ethnic economies. San Diego: Academic Press.Liu, X., Lu, J., Filatotchev, I., Buck, T., & Wright, M. (2010). Returnee entrepreneurs,
knowledge spillovers and innovation in high tech firms in emerging economies.Journal of International Business Studies, 41, 1183–1197.
Mani, S. (2004). Institutional support for investment in domestic technologies: Ananalysis of the role of government in India. Technological Forecasting and SocialChange, 71(8), 855–863.
McEwan, C., Pollard, J., & Henry, N. (2005). The ‘global’ in the city economy: Multicul-tural economic development in Birmingham. International Journal of Urban andRegional Research, 29(4), 916–933.
Nahapiet, J., & Ghoshal, S. (1998). Social capital, intellectual capital and the organiza-tional advantage. Academy of Management Review, 23(2), 242–266.
Ojala, A. (2009). Internationalization of knowledge-intensive SMEs: The role of net-work relationships in the entry to a psychically distant market. InternationalBusiness Review, 18, 50–59.
Oviatt, B. M., & McDougall, P. P. (2005, September). Defining international entre-preneurship and modeling the speed of internationalization. EntrepreneurshipTheory and Practice, 29(5), 537–554.
reation by returnee entrepreneurs. International Business Review
S. Pruthi / International Business Review xxx (2014) xxx–xxx14
G Model
IBR-1091; No. of Pages 14
Ozgen, E., & Baron, R. A. (2007). Social sources of information in opportunity recogni-tion: Effects of mentors, industry networks, and professional forums. Journal ofBusiness Venturing, 22, 174–192.
Parthasarathy, B., & Aoyama, Y. (2006). From software services to R & D services: Localentrepreneurship in the software industry in Bangalore, India. Environment andPlanning A, 38, 1269–1285.
Patel, P. C., & Conklin, B. (2009, September). The balancing act: The role of transnationalhabitus and social networks in balancing transnational entrepreneurial activities.Entrepreneurship Theory and Practice, 33(5), 1045–1078.
Perry, J. T., Chandler, G. N., & Markova, G. (2012, July). Entrepreneurial effectuation: Areview and suggestions for future research. Entrepreneurship Theory and Practice,36(4), 837–861.
Portes, A., & Jensen, L. (1989). The enclave and the entrants: Patterns of ethnicenterprise in Miami before and after Mariel. American Sociological Review, 54,929–949.
Read, S., Sarasvathy, S., Dew, N., Wiltbank, P., & Ohlsson, A. (2010). Effectual entre-preneurship. Abingdon/New York: Routledge.
Rowley, T., Behrens, D., & Krackhardt, D. (2000). Redundant governance structures: Ananalysis of structural and relational embeddedness in the steel and semiconductorindustries. Strategic Management Journal, 21(3), 369–386.
Sarasvathy, S. (2001). Causation and effectuation: Toward a theoretical shift fromeconomic inevitability to entrepreneurial contingency. Academy of ManagementReview, 26(2), 243–263.
Saxenian, A. L. (2002). Transnational communities and the evolution of global produc-tion networks: The case of Taiwan, China and India. Industry and Innovation, 9(3),183–202.
Saxenian, A. L. (2005). From brain drain to brain circulation: Transnational communi-ties and regional upgrading in India and China. Studies in Comparative InternationalDevelopment, 40(2), 35–61.
Sirmon, D. G., Hitt, M. A., Ireland, R. D., & Gilbert, B. A. (2011). Resource orchestration tocreate competitive advantage: Breadth, depth & life cycle effects. Journal ofManagement, 37(5), 1390–1412.
Please cite this article in press as: Pruthi, S. Social ties and venture c(2014), http://dx.doi.org/10.1016/j.ibusrev.2014.03.012
Starr, J. A., & MacMillan, I. C. (1993). Resource cooptation via social contracting:Resource acquisition strategies for new ventures. Strategic Management Journal,11, 79–92.
Strauss, A. L. (1987). Qualitative analysis for social scientists. New York: CambridgeUniversity Press.
Suddaby, R. (2006). From the editors: What grounded theory is not. Academy ofManagement Journal, 49(4), 633–642.
Sullivan, D. M., & Ford, C. M. (2014, May). How entrepreneurs use networks to addresschanging resource requirements during early venture development. Entrepreneur-ship Theory and Practice, 38(3), 551–574.
Terjesen, S., & Elam, A. (2009, September). Transnational entrepreneurs’ ventureinternationalization strategies: A practice theory approach. Entrepreneurship The-ory and Practice, 33(5), 1093–1120.
Ucbasaran, D., Lockett, A., Wright, M., & Westhead, P. (2003). Entrepreneurial founderteams: Factors associated with member entry and exit. Entrepreneurship Theoryand Practice, 28(2), 107–127.
Uzzi, B. (1997). Social structure and competition in interfirm networks: The paradox ofembeddedness. Administrative Science Quarterly, 42, 35–67.
Wadhwa, V., Jain, S., Saxenian, A.-L., Gerefti, G., & Wang, H. (2011, April). The grass isindeed greener in India and China for returnee entrepreneurs: America’s new immi-grant entrepreneurs (Part VI). Kauffman: The foundation for entrepreneurship.
Westhead, P., & Wright, M. (1998). Novice, portfolio and serial founders: Are theydifferent? Journal of Business Venturing, 13(3), 173–204.
Wright, M., Liu, X., Buck, T., & Filatotchev, I. (2008, January). Returnee entrepreneurs,science park location choice and performance: An analysis of high-technologySMEs in China. Entrepreneurship Theory and Practice, 32(1), 131–155.
Yin, R. K. (1994). Case study research: Design and methods (2nd ed.). London: Sage.Zahra, S. A. (2007). Contextualizing theory building in entrepreneurship research.
Journal of Business Venturing, 22, 443–452.
Sarika Pruthi is a Lecturer in International Entrepreneurship & Strategy at theDepartment of Management, King’s College London, University of London.
reation by returnee entrepreneurs. International Business Review