Social ties and venture creation by returnee entrepreneurs

• This paper examines role of returnee entrepreneurs’ social ties in venture creation.
• Returnees leverage strong and weak, international and local ties.
• Local ties are necessary for venture creation.
• The use of ties is contingent on the location of intention and idea for start up.
• Returnees are heterogeneous in the use of social ties in venture creation.

Recent years have witnessed the return of individuals of Indian or Chinese origin from developed markets to their home countries to start new ventures. Returnee Entrepreneurs (REs) facilitate both direct technology transfer and indirect technology spillovers to local firms, thus contributing to the technological development of emerging economies. Much previous work is based on the integration of ethnic entrepreneurs in their host countries or business activities of transnational entrepreneurs that traverse their host and home countries. This study explores the role of social ties in venture creation by REs. Based on twenty case studies in India, the findings show that (1) local ties are indispensable for venture creation, and (2) the heterogeneity in the way REs leverage social ties across the host and home countries is contingent on the location of their intention to start up and generation of idea for their venture. The implications of these findings are discussed.