Title: Diaspora-owned firms and social responsibility
Abstract: ABSTRACTABSTRACTA causal relationship between diaspora populations and bilateral foreign direct investment has been established empirically, but the question of which elements of diaspora difference are responsible for this relationship, and what this implies for development, remains unanswered. A growing literature in economic sociology and business suggests that diaspora investors are motivated by patriotism and other social and emotional factors, endowing them with unique potential as a force for international development. This literature argues that diaspora-owned firms are more socially responsible than other foreign firms, and engage in a range of economic development-promoting behaviors when investing in the homeland: hiring more local labor, paying higher wages, and making more contributions to charity. I argue that diaspora-owned firms enjoy competitive advantages in the homeland based on access and attention to information. I evaluate these theories at the firm level, using data from an original survey of 174 foreign-owned firms in the post-conflict country of Georgia. Across a range of self-reported behaviors and priorities, I find no evidence that diaspora-owned firms are more likely to engage in a specific set of socially responsible, pro-development behaviors than are other foreign firms, and some evidence that they are less likely to do so. I argue that diaspora investors are uniquely capable, but not uniquely philanthropic, when doing business in their homelands.KEYWORDS: Diasporaforeign direct investmentinternational businesssocial responsibilitymigrantsdevelopment ACKNOWLEDGMENTSSpecial thanks to the Rohr Chair of International Relations for fieldwork funding, to the Georgian Foundation for Strategic and International Studies and the Caucasus Research Resources Center for in-country support, and to the wonderful Capital and Conflict: Georgia team: Maya Baramidze, Amiran Chanchibadze, Anna Gogokhia, David Kokiashvili, Alexandre Kukhianidze, Anastasia Laitadze, Giorgi Mekerishvili, Maia Mestvirishvili, Anna Sekowska-Livny, and Giorgi Tarkhan-Mouravi. Thanks also to Lawrence Broz, Miles Kahler, Quan Li, Edmund Malesky, Craig McIntosh, and Kaare Strom for advice and comments and on drafts of this paper and to Liesl Riddle for her overall mentorship and guidance on the project. Mistakes and weaknesses that remain are entirely my own.
Publication Year: 2013
Publication Date: 2013-02-18
Language: en
Type: article
Indexed In: ['crossref']
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Cited By Count: 31
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