| THE INFLUENCE OF IMMIGRANT SOCIAL CAPITAL ON FOREIGN DIRECT INVESTMENT IN THE PRESENCE OF INSTITUTIONAL RISKS |
Received:October 15, 2017 Revised:October 15, 2017 |
Key Words: Foreign direct investment (FDI); immigration; social capital; institutional risks |
| Author Name | Affiliation | | Chengguang Li* | Chengguang |
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Abstract: |
| Building on social capital and institutional theory, this study examines the role of home country and host country immigrants in facilitating foreign direct investment (FDI). We argue that immigrant social capital has a positive influence on FDI by overcoming barriers to cross-border knowledge transfer and trust. We further propose that the positive relationship is moderated by institutional risks contingent on the type of immigrant groups involved and institutional risks present. Based on bilateral immigration data across 27 countries over the 1997-2008 period, we find that while formal institutional risks positively moderate the relationship between immigrant concentration and FDI for home country immigrants, informal institutional risks have a stronger positive moderating effect for host country immigrants than for home country immigrants. |
