Immigrant Effect in International Expansion

The key problem for commitment to international business activities is the lack of knowledge about a host country and its (business) culture. A firm's host country experience and its history of entry patterns in other countries shape entry preferences into a foreign country (Pan, 2000; Chung, 2001; Yiu, 2002; Li, 2008). In the past decade, scholars have become aware of the effect of a specific kind of international experience within the firm: the immigrant effect (Chung, 2001; Tadesse, 2008; White, 2008; Madhavan, 2009). The present chapter reports on the role immigrants fulfil in foreign entry plans and how their involvement relates to the outcome of the foreign entry go/no-go decision. Findings confirm that among the firms that continue in entry, the presence of immigrants in the firm is relatively high. But, and this is unexpected, the same is true for firms that cancel entry plans (Oortwijn, 2010).