شبکه های اجتماعی مهاجرت و ورود خارجی: شرکت های استرالیا و نیوزیلند در اتحادیه اروپا و چین بزرگ

Based on social networking and ethnic networking theories, this paper presents a theoretical framework that hypothesizes the linkages between immigrant social networks and foreign market entry (FME) strategies for firms operating in the European Union (EU) and Greater China (GC) region. “Immigrant effect” (IE) is used as a proxy for immigrant social networks. IE refers to firms that are owned and/or hired immigrants in key decision-making positions to manage and/or market their products/services in the immigrant's country of origin (COO). The findings of this study reveal that immigrants do play a pivotal role in affecting the choice of FME mode into their respective COO in both EU and GC regions. As such, firms could employ a standardized IE–FME framework across the EU and GC regions. However, the antecedents for choosing an IE are different for both regions, thus suggesting that a different antecedent-IE framework for the EU and the GC regions. The results suggest that both standardized and adapted approaches should be considered when formulating the antecedent-IE–FME framework for the EU and GC regions. The findings of this study has theoretical implications for research pertaining to social network/ethnic network and FME, standardization/adaptation as well as practical implications for firms that seek to use IE in transacting business in the immigrant's COO.

As firms seek to expand internationally, a major challenge is to select the appropriate foreign market entry (FME) mode. Research has shown that this strategic decision can affect the success or failure of the undertaking (Anderson & Gatignon, 1986). A significant body of theories has been established in the FME literature, most notable of which are incremental internationalization theory; transaction cost theory (TCA); and eclectic theory (OLI) (Dunning, 1997, Erramilli and Rao, 1993 and Johanson and Vahlne, 1977). Ethnic network theory, i.e., networks formed on the basis of shared ethnicity, has also been used to explain a firm's internationalization process (Camara and Simoes, 2006, Filatotchev et al., 2007, Saxenian, 2002a, Saxenian, 2002b and Zhao and Hsu, 2007). Ethnic network theory is a sub-division of social network theory (Zhao & Hsu, 2007). Research of this nature has suggested that a firm's choice of FME mode is most likely related to the social networks possessed by its immigrant employer and/or employees in the target market (Chung and Enderwick, 2001, Saxenian, 2002a, Saxenian, 2005, Tung and Chung, 2010 and Zhao and Hsu, 2007). Prior research of this nature has shown that immigrants, by virtue of their networks in both their country of residency (COR) and country of origin (COO), can organize “transnational communities” to facilitate the conduct of international business. Thus, transnational communities can enable smaller-sized firms to compete with large multinational corporations in transacting business across international boundaries (Chung et al., 2012, Faist, 2000, Saxenian, 2002b, Snel et al., 2006 and Vertovec, 1999). In fact, Saxenian (2002b, p. 185) has suggested that they may represent “a more flexible and responsive mechanism for long distance transfers of skill and know-how, particularly between very different business cultures or environments”. Furthermore, transnational communities have been hypothesized to exist in both developing and developed nations (Levitt, 2001, Saxenian, 2002b and Snel et al., 2006). This study seeks to build upon the existing literature and extend our understanding of the relationships between immigrant social networks and the choice of FME in two important aspects: first, compared to the traditional theories (e.g., TCA) that are used to explain the behavior of FME, the relationship between social networking and FME has been under-researched; as such, there is need for further insights on this paradigm (Zhao & Hsu, 2007). Though existing social networking research has investigated the role of ethnic networking in FME selection concerning firms’ operation in the developing regions (e.g., Filatotchev et al., 2007 and Zhao and Hsu, 2007), there is evidence that the relationship between ethnic networking and FME can apply to firms that operate in the developed economies (Snel et al., 2006). This suggests that perhaps a standardized IE–FME framework is likely to exist across developing and developed regions that stem from the knowledge and network of immigrants in their COO. Standardization strategy asserts that firms can adopt a uniform strategy or process formulation across their operations in different host markets or regions (Chung, 2003 and Jain, 1989). The use of a standardized framework across both developing and developed regions could allow firms to take advantage of cost saving, uniformed image and easier implementation that are associated with a standardization strategy (Chung, 2010, Jain, 1989, Levitt, 1983 and Samiee and Roth, 1992). In turn, these advantages can help firms establish or maintain their international competitive advantage when operating in the foreign host markets. As such, in this study we will explore whether a standardized framework pertaining IE–FME can be effectively deployed by firms operating in the developed and developing regions. To test this hypothesis, we will focus on firms with operations in the European Union (EU) and those that transact business in the Greater China (GC) region. The EU is a key member of the developed economy while GC represents a major economic force in the developing region. The findings of this study could lend credence to the assertion by Tsui and Farh (1997) and Redding, Norman, and Schlander (1993) that social network/ties are indeed universal. The extension of standardization theory to the IE–FME paradigm could also shed new light on the extant literature on international standardization strategies (e.g., organizational learning, decision-making structure) (Chung, 2010 and Lages et al., 2008). Second, by using data from a sample of Australian and New Zealand manufacturing and service firms, this paper will seek to develop a conceptual framework that posits the antecedent-IE relationship in the EU and GC regions. Such a framework can identify the antecedents and outcomes pertaining to IE and FME for both the developed and developing economies (Tung & Chung, 2010). As such, the findings of this study have important implications for firms that seek to operate in both developed and developing markets and for academics who seek to establish a standardized research framework across countries at different levels of economic development (Chung, 2003, Chung, 2010, Jain, 1989 and Zou and Cavusgil, 2002). In summary in this study we intend to formulate a standardized/adapted set of antecedents-IE–FME guidance for firms operating in the EU and GC regions.

10.1. IE social network and FME The finding that IE social networks can affect the choice of FME mode in both the GC and EU samples provides empirical support to prior research that posits that immigrants, through their ethnic networks in their COO, can play a pivotal role in facilitating business transactions abroad. The presence of IE social networks was found to be positively related to the adoption of a higher resource commitment FME mode. Since the bulk of earlier research has focused on emerging markets (e.g., Saxenian, 2002a and Saxenian, 2005), the comparative analysis of the EU and GC regions here has shown that the relationship between immigrant social networks and FME strategy holds in both the developed and developing regions of the world. The findings of this study have made several important contributions to the literature in the fields of immigrant social networks and FME. First, it confirms that immigrant social networks, in the form of IE, which have hitherto been studied primarily in the context of transnational entrepreneurship can be extended to the analysis and understanding of FME strategies (Portes, 2001 and Portes et al., 1999). IE was found to be an important explanatory factor in understanding the choice of high- versus low-resource commitment FME modes in both the developing (GC) and developed (EU) regions of the world, thereby suggesting that future research on FME modes should include the role of IE (e.g., Dunning, 1997 and Johanson and Vahlne, 1977). The findings of this study support the generalizability of the influence of IE on FME ( Redding et al., 1993 and Tsui and Farh, 1997) due to its universal consistency across GC and EU regions. Second, the standardized IE–FME framework also adds new insights to existing research on IE and standardization strategy ( Chung et al., 2012). In addition to those uncovered in the prior literature that a standardized IE can be used across different markets within a given economic region ( Chung et al., 2012), the findings of this study suggest that a standardized IE–FME can be applied to firms operating in both the GC and EU regions. This finding has thus provided a new research paradigm in research on standardization ( Chung, 2003, Chung, 2010, Jain, 1989 and Zou and Cavusgil, 2002). In light of the findings here, future research on standardization strategies should consider incorporating the immigrant effect, especially as they relate to firms that operate across different host markets (e.g., the cross-market scenario, see Chung, 2003 and Chung, 2010). Third, previous studies have suggested that emigrants from developed countries, such as the US and Ireland, have used social networks to facilitate their business operations in their COO (Levitt, 2001, Saxenian, 2002b and Snel et al., 2006). The results of this study extend these findings to other Western countries in the EU as well, such as the UK, Germany, Italy, and France. Collectively, these findings show that immigrant social networks are indeed a global phenomenon that merit further research attention in the FME literature (Caponio, 2008, Saxenian, 2005 and Tsui and Farh, 1997). Fourth, due to the possible existence of a reverse relationship between IE and FME, this study has sought to examine the FME–IE relationship in both the EU and GC regions. Our study did not reveal such a relationship, thus suggesting that the function of IE in the FME implementation (e.g., FME → IE framework) might not be as significant as far as information search and networking resources are concerned (i.e., IE → FME framework). This results might stem from the reality that the successful implementation of FME might require more than what IE only can offer. In other words, in order to successfully implement a FME mode, the firm has to rely on a wider range of resources and competencies that beyond the mere possession of IE. 10.2. Local environmental conditions Though prior research has suggested that environmental factors can most likely affect the deployment of IE (e.g., Gould, 1994), this study has yielded mixed findings. As shown in Fig. 2a and b, in the GC region, environmental factors had no significant influence on the choice of IE; whereas in the EU region, both legal and competitive environments appeared to have a significant influence on the choice of IE. Because of this mixed finding, the effect of local environmental conditions on the social network was further analyzed through a comparison between IE and non-IE users (Table 2). Table 2 shows that the difference in means between IE and non-IE users for both the legal and competitive environments was smaller in the GC sample than that in the EU sample. At least four possible reasons could have contributed to this mixed result. One, environmental factors might affect the use of IE social networks only where the perceived level of environmental differences has reached a critical threshold level, below which it is unlikely to yield an effect. For example, the perceived differences between IE and non-IE users in the GC sample on these two environmental factors (legal and competitive) ranged from 0.07 to 0.14, while the perceived difference on these same two dimensions in the EU sample were between 0.30 and 0.36 (Table 2). Two, from a completely different perspective, this finding may suggest that the use of immigrant social networks alone might not be sufficient to counteract the impact of environmental factors when entering markets where the perceived level of difference between the home and host markets is too large (e.g., GC region). Under such conditions, IE social networks cannot mediate the effect of environmental factors as far as the choice of FME is concerned. If this condition were to hold in other samples, then earlier research (Gould, 1994, Saxenian, 2002a and Saxenian, 2005) that suggests that IE social networks can be used to overcome challenges posed by environmental variations between home and host markets needs to be revisited. In other words, IE may be useful only under specific circumstances. The finding here also suggests that managers should probably utilize a variety of mechanisms to overcome the barriers associated with the host market environment (Dunning, 1997). Three, while firms in both the GC and EU regions may use IE social networks, the reasons for their deployment might be different. As reported in the literature, in addition to their knowledge of the host country environment, IE networks could also be used to assist firms to acquire important market information/intelligence and gain access to capital to help fund business operations in the GC region. Therefore, it is possible that instead of using IE to help overcome the barriers associated with environmental differences, immigrant networks are used to gather market information and acquire useful business connections, when operating in this region. If this finding were to hold in other samples, future research should explore the broader roles that IE could play in their COOs besides overcoming the uncertainties associated with environmental factors (Froschauer, 2001). Four, the finding that difference in legal environment is positively related to the use of IE social networks is consistent with that reported in the literature (Rauch, 1999 and Saxenian, 2005). The information and resources embedded in IE social networks can be used to cope with legal differences between COR and COO. In addition, the fact that a variation in the competitive environment is positively related to the deployment of IE social networks provides further empirical support that suggests the advantages associated that immigrants, through their social connections, can enable the firm to gain proficiency rapidly in managing complex business relationships across two different countries (Saxenian, 2002a). Where the competitive environment is highly different between the home and host markets, firms can rely on their IE social networks to assist them to manage their international business relationships. In summary, though environmental factors are suggested to have a significant impact on the selection of IE regarding firms’ operation in the developing and developed regions in the literature, our analysis suggests that firms might need to adopt a modified environment-IE framework for their operations in the developing (GC) and developed (EU) regions as the findings across both regions are different. The results of this study suggest that the explanatory factors of IE established in one economic region needs to be carefully assessed before it can be transferred to firms operating in another region at a different level of economic development (Chung, 2004). Our result suggests that a common standardized environment-IE framework that is applicable across regions at different stages of economic development has yet to be established. 10.3. Firm size The PLS outcomes of this study suggest that firm size can act as an explanatory factor in both the developing and developed regions. In the EU region, small-sized firms tended to use IE social networks to assist them in making their FME decisions, while large-sized firms were more prone to rely on such networks in the GC sample. The PLS outcomes is consistent with the descriptive statistics on firm size in Table 2. In the GC sample, the average firm size for non-IE and IE users was 210 and 842 employees, respectively. In the EU region, the average number of employees was 282 for the non-IE users and 221 for the IE users (Table 2). The mixed results are consistent with the conflicting findings in the extant literature on the impact of size. Several reasons could have contributed to this mixed result. First, the difference in findings might be attributed, in part at least, to the difference in industry under investigation. Saxenian, 2002a and Saxenian, 2002b, for example, focused on the high-tech industries in the Silicon Valley. Given the more entrepreneurial focus of these start-ups where the objective is to establish dual beach-heads of business in both the COO and COR of the immigrants, it appears logical that small-sized firms in Saxenian's studies were more likely to pursue an IE social network. However, in this study that surveyed firms that were engaged in the food sector, clothing and raw materials, large-sized firms might be in a better position to benefit from the social networks associated with immigrants. A second possible reason may pertain to the fact that since the majority of firms in Australia and New Zealand are smaller in size than their counterparts in the US (Akoorie & Enderwick, 1992), only firms that have reached a certain critical mass (i.e., a certain firm size and, hence, large by Australian/New Zealand standards) could afford to hire immigrant employees to assist them in transacting business in the immigrants’ COO. A third possible reason as to why small-sized firms in the EU sample were more likely to rely on IE could be that their social connections might have enabled them to gain access to capital to transact business internationally more quickly than those firms without such immigrant networks (Levitt, 2001). This advantage might have enabled small-sized firms to commit to FDI modes when operating in the developed region. Typically, only large companies could afford to enter via FDI modes that entail higher resource commitment. Lastly, the findings on the relationship between firm size and the deployment of IE in EU and GC are more complex than hypothesized in earlier research, thus calling into question the existence of uniform firm size-IE framework for both developing and developed regions. Due to the nature of the industry and/or product and the effect of local host market environment, firms would most probably need to customize their firm size-IE framework for their operations in the developing vis-a-vis developed regions of the world. 10.4. International business experience (IBE) This study has found that the presence of IE social network is positively related to a firm's IBE in the EU sample, while no difference was found in the GC sample between firms with more or less years of IBE. That is, firms with a longer history of IBE were more likely to pursue an immigrant social network when doing business in the EU, while there was no difference among firms that were operating in GC. In the GC sample, the two items that measured IBE (number of years in IBE and number of other countries) were almost equal between IE and non-IE users (22 versus 21 years; 15 versus 15 countries, respectively) (Table 2). This suggests that firms with both low and high IBE relied on immigrant social networks. The finding here appears to contradict previous research that hypothesizes that firms with less IBE were more likely to use an IE (Chung, 2004, Hsu and Saxenian, 2000, Saxenian, 2002a and Saxenian, 2005). Several reasons might have contributed to this finding: one, since China has been consistently ranked as the most attractive destination for FDI, competition in the GC market has become very intense. Thus, firms that seek to enter this region, regardless of years of IBE, must resort to all available sources (e.g., IE networking) to increase the likelihood of success. Two, when operating in the EU region, perhaps only firms with more years of IBE can truly appreciate the benefits that can be derived from the existence of IE social networks (Chung, 2004, Hsu and Saxenian, 2000, Saxenian, 2002a and Saxenian, 2005). Table 2 shows that there are significant differences between IE and non-IE users in the EU sample in terms of number of years in IB and number of countries that the firms operate in (19 versus 12 years; 15 versus 11 countries). Therefore, it is possible that IE users in the EU might have realized that because of the benefits they have derived from immigrant social networks in their operations in other regions of the world, they are more inclined to duplicate their “tried and true” strategy when doing business in the EU. In other words, if a strategy works in one market, it may be counterproductive to deviate from it in other markets (Björkman and Kock, 1995, Camara and Simoes, 2006 and Yeung and Tung, 1996). This finding on IBE and IE has contributed to the immigrant social networks and standardization literature in four important ways: one, it shows that the presence of immigrant social networks can benefit firms with varying degrees of IBE. Two, while previous research has shown that immigrant social networks are more useful in developing countries (Saxenian, 2002a and Saxenian, 2005), this study found that they can be equally as efficacious in the developed (EU) countries of the world. Three, this finding can complement Johanson and Vahlne's (1977) research on the incremental approach to internationalization with regard to the important role of the firms’ experience in the internationalization process. Thus, future research should incorporate IE in their research framework because of its potential in speeding up a firm's internationalization process. Finally our results on firms’ operation in the EU and GC regions indicate that firms would need to employ a customized IBE-IE framework for their operations in the developing vis-a-vis developed regions due to the different effect of IBE on IE in both regions. This lends support to Chung, 2003 and Chung, 2010 assertion of a regional approach; in other words, the IBE-IE framework is more likely a within-economic region rather than across-region phenomenon. 10.5. Managerial implications The outcomes of this study have two implications for practitioners and researchers who are interested in uncovering the role of IE in international business management (Tung & Chung, 2010). First, managers who operate in the EU and GC regions should take advantage of standardization strategy by implementing a standardized set of IE–FME framework specific to the region of the world in which they are operating. In addition to formulating their regional-specific standardized marketing program strategies (product, price, place and promotion) (Jain, 1989 and Chung, 2010), managers should seek to hire immigrants who have special knowledge and contacts in their COO to manage their operations in the host markets. The findings of this study suggest that firms should consider adopting a more integrative approach when operating in the EU and GC regions regarding their IE–FME formulation as the experience in both regions can probably be shared with each other. Second, managers should be aware that the conditions for utilizing an immigrant effect are different in the EU vis-a-vis GC regions. This outcome suggests that the antecedent-IE framework needs to be adapted for the EU vis-a-vis GC regions. This implies that when adopting the IE in their operations, managers need to carefully evaluate the effect of local environment conditions and their firm characteristics as they relate to IE. In other words, it is unwise for managers to adopt a standardized set of assessment criteria for IE selection without a thorough review of the impact of environmental and firm factors on IE. 10.6. Limitations and future research Similar to research of this nature, this study has suffered from several limitations which need to be addressed in future research. First, this study has only focused on Australian and New Zealand firms with operations in Greater China and the EU. Thus, it is not possible to generalize the findings of this study to firms in North America, such as the US and Canada, that have sizable immigrant populations. The expansion to other regions might also help resolve the inconsistent result in the antecedent-IE–FME framework. It is possible that the varied results in the antecedent-IE framework might only occur in the EU vis-a-vis GC scenario. To help resolve the inconsistency, future research should examine this relationship among firms operating in other regions (e.g., North America vis-a-vis South America). Such studies can clarify the antecedent-IE results. Second, future research should investigate whether the findings concerning antecedents, IE and FME can be applied to other forms of entry modes. In particular, future research should investigate if the findings revealed in this study can be applied to other FDI modes such as acquisitions (full or partial) and mergers. Due to their relatively shorter international business experience, our respondents have not adopted these more sophisticated FDI modes in their FME decision. By focusing on a wider range of FDI modes in future research, it can broaden our current understanding of IE and FME. Three, future research should continue to explore the antecedents of IE as the research on IE is still developing. For example, future research could investigate if firms that operate under conditions of high market turbulence, technological turbulence and competitive intensity are more likely to use an IE (Jaworski & Kohli, 1993). These factors are considered as important for firms operating in the international business context (Cadogan, Cui, & Li, 2003). Insights garnered from future studies on their relationship with IE can significantly advance our understanding of these factors as they relate to IE. Fourth, future research should attempt to integrate ethnic and social networking theories in their framework formulation. In this regard, research could explore whether IE is associated with political and business ties as both forms of social ties have been proposed in the social networking theory (Acquaah, 2007 and Li et al., 2009). Fifth, future research could further investigate the inconsistent results obtained in this study between developed and developing regions by using a secondary oriented data set (e.g., Rauch, 1999). Studies of this nature could consider environmental differences gauged in terms of GNP per capita, infrastructure and other secondary data measures. Findings from studies of this nature can help clarify the relationship between antecedents and IE. Furthermore the usage of secondary data can also help to resolve the possible errors occurred in the primary data collection process. As this study has included firms operating in a wide range of industrial sectors and host countries, perhaps there may be inconsistencies in responses among the subjects surveyed. This limitation might have also affected the robustness of the results established. The usage of secondary data might rectify this possible error. Lastly, among the hypotheses proposed for the two regions under investigation in this study, only selected hypotheses were supported (e.g., H1a, H1b, H2b, H3b). This limited support of the hypotheses investigated in this study may be related to the early development of the cross-regional antecedent-IE–FME theory. Though previous literature has suggested that it is possible to establish a standardized antecedents-IE–FME framework, this hypothesized framework has not yet been tested in prior empirical research. Due to the varied environmental conditions of the host countries across the developed and developing regions, perhaps it is unlikely that a standardized framework can be applied across both regions. As such, further research should continue to investigate the antecedent-IE–FME framework across both regions as the differences in FME strategies into the developed and developing countries are decreasing. It is possible that a completely standardized framework can be applied when the gap between these two regions has narrowed further.