Building on the social network and strategic entrepreneurship literature, we investigate the overall relationship between returnee entrepreneurs’ networks in different periods and locations, domestic resource acquisitions and firm performance. While the labor mobility literature emphasizes the “gone but not forgotten” networks in the prior location of migrants, other studies argue that returnees suffer from a lack of local networks. Our findings show that returnee entrepreneurs are different in the extent of their home country embeddedness while they are overseas, which indicates different degrees of enduring networks in the home countries. The effect of home country embeddedness improves the performance of returnee entrepreneurship via domestic resource acquisition, and this effect could be substituted by pre-overseas local ties and the presence of local top management team (TMT) members. This study extends returnee research by shedding light on the importance of network maintenance in determining whether the home country’s network endures or decays and by highlighting the interactions of ties in the different periods of pre-overseas, during overseas, and after return.
Over the past 10 years, we have witnessed a growingtrend of people returning to their home countries after studying/working abroad. For example, in China, there were 523,700 students going abroad and 409,100 returning in 2015, with a reflux ratio of 78.1% compared to that of 29.5% in 2005. From 2012 to 2014, 991,200 overseas Chinese students came back to China, exceeding the total number of returning students in the past 30 yearsi . Among them, some of the returnees entered entrepreneurship. According to a report on China’s entrepreneurshipii, 63,000 returnees had participated in entrepreneurship in the overseas student pioneer parks by 2014. It has been demonstrated that returnee entrepreneurs have advantages in transferring advanced knowledge from developed host countries to developing home countries, thus benefiting innovations, firm performance, and industry development (Dai & Liu, 2009; Lin, Lu, Liu, & Choi, 2014; Lin, Lu, Liu, & Zhang, 2016; Liu, Lu, Filatotchev, Buck, & Wright, 2010; Zweig, Chung, & Vanhonacker, 2006). Returnee entrepreneurs are defined as natives who have studied and/or worked in foreign countries for at least two years and then returned to their home countries to start up new ventures (Filatotchev, Liu, Buck, & Wright, 2009). They represent a distinct form of entrepreneurs who are exposed to both home and host countries and have attracted increasing attention in entrepreneurship research (Qin & Estrin, 2015; Schotter, Mudambi, Doz, & Gaur, 2017; Wright, Liu, Buck, & Filatotchev, 2008). However, the existing literature has shown inconsistent results regarding the performance of returnee entrepreneurship. Some studies argue that returnees have been isolated from their home countries for years and may lack local networks and face readjustment difficulties when returning to their home countries (Gaw, 1995; Szkudlarek, 2010). This may harm their firm performance (Li, Zhang, Li, Zhou, & Zhang, 2012; Wahba & Zenou, 2012).