When do ethnic networks help with foreign direct investment location?

Jorge Luis Alcaraz Vargas, Elizabeth Salamanca

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)


The purpose of this paper is to identify how the cultural attributes of ethnic networks affect foreign direct investment (FDI) location.
The study tests on panel data the effect of ethnic networks in interaction with their member’s cultural attributes on FDI location.
Results show that ethnic networks whose members predominantly exhibit a human orientation do not affect FDI location. However, when performance orientation is the predominant cultural attribute of the members of an ethnic network, there is a positive and significant effect on FDI location.
Practical implications
Managers need to be aware that not all networks will be equally helpful in achieving particular goals. For instance, ethnic networks where the performance orientation is dominant among their members affect FDI location, unlike ethnic networks where human orientation is dominant. Therefore, decision-makers need to identify and align these two elements (networks and goals) to maximize outcomes.
This study contributes to the literature by suggesting that FDI location is affected by ethnic networks where performance orientation is dominant among the members, which is not the case when human orientation is dominant among the members of the ethnic networks.
Original languageEnglish
Pages (from-to)397-415
Number of pages19
JournalReview of International Business and Strategy
Issue number3
Early online date27 Jul 2022
Publication statusPublished - 24 Mar 2023

Bibliographical note

Funding Information:
The authors would like to thank Andres Vasquez for the substantial research assistance provided for this project. Thanks to Fabian Osorio for his insightful comments. Thanks, as well, to the editor, Hussain Rammal, and anonymous reviewers for their helpful observations and suggestions.

Publisher Copyright:
© 2022, Emerald Publishing Limited.


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