Being a regular reader of Harvard Business Review articles, I recently came across a very unique study conducted by two HBS professors, Ramana Nanda and Tarun Khanna. Titled "Diasporas and Domestic Entrepreneurs: Evidence form the Indian Software Industry" the paper examines the relations between the Indian diaspora which is estimated close to 18 million and spread over 130 countries and the Indian software industry.
It tries to answer two key questions
- Are entrepreneurs who are based in cities where matching with prospective clients, new referrals and monitoring is easier, less likely to rely on the diaspora than entrepreneurs based in cities where this is harder?
- do entrepreneurs who rely on the diaspora have better performing firms than those who do not tap into the expatriate community?
With data from the NASSCOM, the two professors have done detailed mathematical regression analysis to arrive at their findings. The paper can be downloaded here.