Diaspora Interest in Homeland Investment

Author(s): Kate Gillespie, Liesl Riddle, Edward Sayre and David Sturges
Source: Journal of International Business Studies, Vol. 30, No. 3 (3rd Qtr., 1999), pp. 623-634
Published by: Palgrave Macmillan Journals
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 Diaspora Interest in Homeland
Investment

KateGillespie*
THE UNIVERSITY OF TEXAS AT AUSTIN

Liesl Riddle**
THE UNIVERSITY OF TEXAS AT AUSTIN

EdwardSayre***
KENYON COLLEGE

DavidSturges****
THE UNIVERSITY
OFTEXAS-PAN AMERICAN

This paper examines four they be generalized across the

diaspora communities resident in four communities? The paper
the United States that were explores concepts of ethnic
targeted by their homelands as advantage, altruism, homeland
foreign investors during the orientation, and perceptions of
1990s. The homelands comprise business impediments, as well as
Armenia, Cuba, Iran, and Pales- investigating the role of demo-
tine. We pose the question: What graphic factors regarding invest-
are the determinants of interest in ment interest.
homeland investment, and can

M ost less developed countries cur-
rently welcome or even encourage
foreign investment. In fact, they often
find themselves in competition for such
investment. Various empirical studies
suggest that foreign direct investment
(FDI) is affected positively by domestic
market size [Davidson 1980; Dunning
1973; Nigh 1985; Scaperlanda and
Mauer 1969; Terpstra and Yu 1988],

*KateGillespie is Associate Professor of International Business in the Department of

Marketing Administration at The University of Texas at Austin.
**Liesl Riddle is a Ph.D. candidate in the Department of Sociology at The University of
Texas at Austin.
Edward Sayre is Visiting Assistant Professor of Economics, Deparment of Economics at
Kenyon College.
David Sturges is Associate Professor of Management in the Department of Manage-
ment, Marketing and International Business at The University of Texas-Pan
American.

JOURNAL OF INTERNATIONAL BUSINESS STUDIES, 30, 3 (THIRD QUARTER 1999): 623-634. 623

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DIASPORA INTEREST IN HOMELAND INVESTMENT
adequate infrastructure, and attractive
structural characteristics [Kumar 1994].
LDCs that rank relatively low on some
or all of these factors may need to pur-
sue creative strategies. Our study
explores one such strategy: the target-
ing of diasporas for homeland invest-
ment.
The international business impact of
emigrant communities has been noted
in a number of studies. Researchers
have observed and even quantified the
particular importance of emigrant
investment [Gillespie 1984; Kao 1993].
Overseas Chinese and Egyptians played
significant roles as investors in their
homeland at times in which these coun-
tries were considered unattractive by
most multinational corporations. Some
investments came from expatriate busi-
nesses that were already established
abroad, while others were made by pro-
fessionals whose homeland investments
represented their first business cre-
ations; i.e., new transnational entrepre-
neurs. In either case, emigrant partici-
pation not only provided needed invest-
ment at the time, but it also helped
improve others' perceptions of the
investment climate.
While many countries experience
emigration, those whose emigrant com-
munities qualify as diasporas could be
better positioned to elicit interest in
homeland investment given the salient
characteristics of diasporas: (1) they
maintain a memory, vision, or myth
about their original homeland, (2) they
are committed to the maintenance or
restoration of their homeland, and (3)
their consciousness and solidarity are
importantly defined by this continuing
relationship with the homeland [Safran
1991]. It is this continued psychic
relationship with the homeland that
differentiates diaspora communities
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from other expatriate communities,
whose members attempt to assimilate to
the new culture and distance them-
selves from their country of origin.
Indeed, Cohen [1997] credits diaspora
communities with facilitating interna-
tional commerce, and Kotkin [1992]
predicts that they will wield significant
influence in the economy of the 21st
century.
During the mid-1990s we observed
four governments representing problem-
atic investment sites that announced
their intentions to solicit FDI from their
diasporas in hopes of benefiting from
transnational entrepreneurial as well as
corporate investment. These were the
governments of Armenia, Cuba, Iran
and Palestine. All possessed significant
communities resident in the United
States that were identified by scholars
as meeting the qualifications to be
deemed a diaspora [Bakalian 1993;
Bozorgmehr 1995; Kotkin 1992; Orfalea
1988; Portes and Bach 1985]. Two
countries, Armenia and Palestine, were
re-emerging states that only recently
acquired independent governments.
The other two, Cuba and Iran, were
repositioning states; i.e., the same gov-
ernments that were responsible for exil-
ing their diasporas were now seeking a
rapprochement and courting their
investment.
Yet little is actually known as to why
a diaspora member from either a re-
emerging or a repositioning state would
even be interested in homeland invest-
ment when poor investment climates
likely eliminate these countries from
consideration by multinational corpora-
tions. Thus emerged our research ques-
tion: What are the determinants of
interest in homeland investment, and
can these factors be generalized across
these four communities?
JOURNAL OF INTERNATIONAL BUSINESS STUDIES
 KATE GILLESPIE, LIESL RIDDLE, EDWARD SAYRE AND DAVID STURGES
HYPOTHESESDEVELOPMENT
The only research that examines
interest in homeland investment is
Aharoni's [1966] case study of invest-
ment in Israel. Research on transnation-
al entrepreneurship is equally under-
examined, despite entrepreneurship
being cited as one of the four major
directions for international business
research [Wright and Ricks 1994]. The
following hypotheses are derived, there-
fore, from various literatures including
those of FDI and migration as well as
interviews with diaspora members from
the four communities.
Ethnic Advantage
Several studies concerning psychic
distance have observed that firms exhib-
it a propensity to invest in countries
culturally similar to their home country,
especially early in the internationaliza-
tion process. This may be due to the
fact that some decision makers associate
culturally similar markets with lower
business uncertainty, since one could
assume more market knowledge in a
culturally similar market than in a cul-
turally distant one [Johanson and
Vahlne 1977; Davidson 1980, 1982;
Root 1983]. A similar perceived advan-
tage has been noted in the literature
concerning immigrant entrepreneurship
in the United States [e.g., Bonacich and
Modell 1980; Portes and Bach 1985].
This literature suggests immigrants
often believe that as fellow co-ethnics,
they are better able to ascertain and
meet the needs of their immigrant com-
munity. Thus, immigrants have a
propensity to establish businesses
geared to their particular ethnic market.
In terms of a diaspora community,
whose referent ethnic group extends
beyond national boundaries, this per-
ceived ethnic advantage may well tran-
VOL. 30, No. 3, THIRDQUARTER,1999
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scend the local market and include the
market of the homeland. We refer to
this perception as "ethnic advantage,"
and we propose:
Hi: Ethnic advantage positively
affects interest in homeland invest-
ment.
Altruism
Preliminary interviews conducted by
the research team indicated that some
community members did not want to
invest in the homeland for profit alone.
Researchers have explored the role of
social responsibility as a consumer and
organizational purchasing criterion, yet
this type of altruistic motivation for
investment has yet to be studied in-
depth. However, it was mentioned as a
motivation for Jewish diaspora invest-
ment in Israel during the initial state-
building period of the late 1940s and
1950s [Aharoni 1966]. We suggest that
persons who rate higher on measures of
altruism towards the homeland would
also register higher on interest to invest.
This yields our second hypothesis:
H2: Homeland altruism positively
affects interest in homeland invest-
ment.
Homeland Orientation
Dichtl, Koeglmayr and Mueller [1990]
posit that certain managers might in
themselves exhibit a greater orientation
for the foreign marketplace, thus posi-
tively influencing their decisions for
their firms to enter foreign markets.
They operationalized foreign-market
orientation as including foreign travel
and foreign language proficiency. In a
five-nation study they found support for
hypotheses relating foreign-market
entry (in this case, exporting) with man-
625
DIASPORA INTEREST IN HOMELAND INVESTMENT
agers' command of foreign languages
and travel stays abroad. The former
finding supported earlier studies
[Cavusgil 1982; Barrett and Wilkinson
1986]. Aharoni [1966] also noted evi-
dence that contact with relatives in the
homeland could affect investment inter-
est. These studies suggest that diaspora
members who are homeland-oriented;
i.e., those who use the homeland lan-
guage, visit the homeland regularly
and/or keep in contact with relatives in
the homeland might exhibit a greater
predilection to enter homeland markets
and invest there than members who do
not exhibit these characteristics. This
yields our third hypothesis:
H3: Homeland orientation positively
affects interest in homeland invest-
ment.
Perceptions of Business
Impediments
As stated above, governments that tar-
get diasporas for investment may do so
because their countries appear relatively
unattractiveto foreign investors in gener-
al. Aharoni [1966] notes a number of
business impediments that appearto neg-
atively affect the investment decision
process in its earlier stages within the
multinational corporation. These factors
include poor physical, financial, and
legal infrastructure;difficulty in obtain-
ing information; and excessive govern-
ment bureaucracy. Diaspora members
may believe that they can betterhandle or
circumvent such problems and may be
less negatively influenced by such
impediments in the homeland as a result.
This yields our fourthhypothesis:
H4: Estimation of business impedi-
ments will not affect interest in home-
land investment.
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Demographic Variables
Since the literature on FDI has
focused on the behavior of the firm, we
again have little literature to identify
personal demographic variables that
might affect interest in investment.
However, managerial demographics
have been examined under the broader
rubric of foreign-marketentry, again in
the exporting literature. Dichtl,
Koeslmayr and Mueller [1990] observed
that in two national samples, exporters
were younger than non-exporters. They
also observed that in four national sam-
ples, exporters had higher education
than non-exporters, and other studies
found that firms with more educated
managerial personnel exhibited greater
international involvement [Barrett and
Wilkinson 1986; Cavusgil 1982]. This
yields our fifth and sixth hypotheses:
H5: Education level positively corre-
lates with interest in homeland
investment.
H6: Age negatively correlates with
interest in homeland investment.
The self-employed could be more com-
fortable with the idea of establishing a
business, thus decreasing the perception
of overall risk of a venture in the home-
land. There is also strong evidence that
entrepreneursare greaterrisk-takersthan
others [Hornaday and Aboud 1971;
McClelland 1961; Shane 1996]. This
could prove significant for considering
investment in problematicenvironments.
This yields our seventh hypothesis:
H7: Self-employment positively
affects interest in homeland invest-
ment.
One might also expect first generation
JOURNAL OF INTERNATIONAL BUSINESS STUDIES
 KATE GILLESPIE,LIESLRIDDLE,EDWARDSAYREAND DAVID STURGES
immigrants to be more interested in
investing in their country of origin
because of their closer ties to it. Yet, for
diasporas, the psychic tie to the home-
land is purported to transcend genera-
tion [Safran1991]. Thus, we propose:
H8: Generation will not affect inter-
est in homeland investment.
METHODOLOGY
We designed a 55-question mail sur-
vey in order to investigate the attitudes
toward homeland investment of US
Armenians, Cubans, Iranians, and
Palestinians. Questions were written to
operationalize ethnic advantage, home-
land altruism, homeland orientation,
perceptions of business impediments,
and investment interest, as well as to
collect demographic information.
Members of diaspora organizations, as
well as businesspersons and profession-
als from each of the communities,
assisted in the development of the con-
structs and pre-testing of the question-
naire.
Designing a sampling technique that
would efficiently generate useable sam-
ples from the four populations was
complex, since the communities are
very rare and fairly geographically dis-
persed. Many methodologists have rec-
ognized the difficulty in applying con-
ventional sampling methods to such
populations and have recommended
that researchers first consider redefining
the target population [e.g., Sudman
1976]. Since complete enumerations of
the populations under investigation did
not exist, we narrowed our definition of
the target populations to diaspora mem-
bers who appear on organizational
membership lists. This technique is
often used for sampling very rare popu-
lations [Kalton 1983].
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The selected frames consist of mailing
lists provided by different religious,
business, and cultural community orga-
nizations. The Armenian frame was a
list of 2000-plus charitable contributors
to the North American Eastern Diocese
of the Armenian Orthodox Church, and
the Iranian list consisted of 800 mem-
bers of the Iranian-American Organi-
zation. The Cuban-American National
Foundation (CANF) participated in the
pretesting for the Cuban community but
denied us access to their membership
list unless we guaranteed them control
over the data collected. Our contact at
CANF, however, recommended the
membership list (803 names) of the
Hispanic Business Association of
Miami, whose membership is predomi-
nantly Cuban. This frame was used
employing a filter to select Cuban
respondents only. Acquiring an appro-
priate mailing list of Palestinian names
was even more difficult, since
Palestinian-Americans tend to be mem-
bers of various Arab-Americanorganiza-
tions, and these organizations generally
do not divide their mailing lists accord-
ing to homeland country. However, we
were successful in obtaining a list of
297 influential Palestinians residing in
the United States that had been original-
ly compiled for a Geneva-based philan-
thropic organization.
In the second sampling phase, sys-
tematic samples were drawn from the
frames except in the case of the
Palestinian list where a census was
taken. Questionnaires were followed by
reminder cards mailed out two weeks
later. A total of 572 people responded
and returned a completed question-
naire. The response rates for the
Armenian, Cuban, Iranian, and
Palestinian samples were 41, 17, 17 and
19 percent respectively. This is on the
627
DIASPORAINTERESTIN HOMELANDINVESTMENT

higher end of the typical response rate ANALYSIS AND RESULTS

range for a cold mail survey [Dillon,
Madden, and Firtle 1988].
While respondents to this question-
naire might be assumed to be more
interested in investment in the home-
land than non-respondents, there was
considerable variation in investment
interest both within and between
groups. Forty-five percent of the
returned questionnaires indicated no
interest in foreign direct investment in
Armenia, compared with 18 percent for
the Cuban sample, 23 percent for the
Iranian sample, and 22 percent for the
Palestinian sample. (See Table 1 for a
further breakdown of descriptive statis-
tics for the four samples.)
We defined our dependent variable,
investment interest (INVINT), as
respondents interested in at least one of
the following: (a) manufacturing facili-
ties in [the homeland] to produce prod-
ucts for sale in [the homeland], (b) man-
ufacturing facilities in [the homeland]
to produce products to be exported from
[the homeland], and (c) service opera-
tions located in [the homeland].
Respondents were coded not interested
(0), potentially interested (1) or current-
ly interested (2). Measures of ethnic
advantage, altruism and business
impediments are presented in Table 2.
We employed three measures for

TABLE 1
DESCRIPTIVESTATISTICSFOR THE FOUR SAMPLES*

Armenian
(n=166) Cuban (n= 111) Iranian (n= 78) Palestinian
(n= 40)
Variable CurrentPotentialCurrentPotentialCurrentPotentialCurrentPotential
InterestforSale 3% 34% 9% 42% 21% 45% 14% 52%
in Homeland
InterestforExport 6% 41% 8% 41% 20% 46% 14% 55%
ServicesInterest 8% 36% 15% 57% 16% 38% 21% 44%
EthnicAdvantage 2.75 (0.93) 3.29 (1.05) 3.58 (0.80) 3.63 (0.93)
Altruism 3.76 (1.04) 2.43 (1.69) 3.69 (1.09) 4.08 (1.04)
Speak 50% 97% 99% 98%
Read 21% 87% 81% 70%
Visits 7% 7% 50% 41%
Relatives 15% 59% 96% 67%
BusinessImpediments 2.17 (0.41) 2.70 (0.31) 2.22 0.35) 2.11 (0.37)
College 60% 70% 90% 81%
Age 58.2 (15.4) 49.8 (11.4) 45.4 (11.1) 53.4 (11.4)
Self-employment 21% 52% 59% 61%
FirstGeneration 32% 92% 100% 93%
SecondGeneration 54% 8% 0% 7%
Income $30,000$39,000 $100,000+ $100,000+ $100,000+
Female 28% 21% 21% 8%
*Incells withtwo values,the firstis the meanandthe valuein parenthesesis the standarddeviation.See foot-
notes in Table2 (Variablesand Measures)for scale explanations.The incomemeasurewas categoricalwith
multipleresponsechoices;therefore,the mode,a bettermeasureof centraltendency,is reported.

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 KATE GILLESPIE, LIESL RIDDLE, EDWARD SAYRE AND DAVID STURGES

TABLE2
a
ANDMEASURES
VARIABLES
Index Alphas | Measures
Ethnic .748,.784,.800,.812 I believe I have a competitive advantage in
Advantage doing business in (the homeland) because I
share the same ethnic backgroundas the people
in (the homeland).
I have much in common with people in (the
homeland).
I believe that doing business in (the homeland)
is less risky for me because I share the same eth-
nic backgroundas the people in (the homeland).
I understand consumer preferences in (the
homeland) better than the average American
businessperson because I share the same ethnic
backgroundas the people in (the homeland).
I believe I understand how to do business in
(the homeland) better than the average
American businessperson.

Altruism I believe that (community members) in the

United States should invest in (the homeland)
and not just donate to (homeland) or (home-
land-American)charities.

Business .767, .809, .828, .796 Weak financial system

Impedimentsc Poor physical infrastructure
Lack of U.S. government support for investment
in (the homeland)
Cumbersomegovernment bureaucracy
Unclear who in the government has the authori-
ty to approve or facilitate foreign investment
Hostilities with neighboring countries
Internalstrife
Weak legal system
Governmentcorruption
Absence of a pro-business government
Lack of specific investment opportunities com-
municated to smaller overseas investors
Too few economic incentives provided by (the
homeland)
Problems with labor and/or labor laws

aUnless otherwise noted, 1 = Strongly Disagree, 2 = Somewhat Disagree, 3 = Neutral, 4 = Somewhat

Agree, and 5 = Strongly Agree
bThe order for the alphas is Armenian, Cuban, Iranian, and Palestinian
CScale: 1 = Not an impediment, 2 = An impediment, 3 = A major impediment

homeland orientation: (1) homeland guage, and (3) whether or not the
visitation, (2) whether the respondent respondent kept in contact with rela-
read periodicals in the homeland lan- tives in the homeland. Since virtually

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DIASPORAINTERESTIN HOMELANDINVESTMENT

TABLE3
ORDEREDPROBITRESULTS
DEPENDENT IN DIRECrINvEsTmEw IN rim HoMELAND
VARIABLE:INTEREST
Armenian(n=173) Cuban(n=112) Iranian(n=82) Palestinian(n=44)
ETHNAD 0.218** 0.553*** 0.488** 0.456**
(0.104) (0.130) (0.185) (0.280)
ALTRUISM 0.189** 0.148** 0.389*** 0.654**
(0.099) (0.077) (0.141) (0.292)
READ -0.234 0.188 -0.270 1.894***
(0.274) (0.366) (0.351) (0.712)
NUMVIS 0.457** 0.449* 0.034 0.189
(0.199) (0.311) (0.123) (0.201)
RELATIVE -0.010 -0.473** 0.253 -0.416
(0.261) (0.248) (0.734) (0.585)
BUSIMP -0.035 -0.166 0.090 -0.512
(0.236) (0.404) (0.394) (0.609)
COLLEGE -0.197 -0.077 0.413 -0.908
(0.194) (0.266) (0.462) (0.735)
AGE -0.009* -0.008 -0.017 -0.026
(0.006) (0.011) (0.012) (0.021)
SELFEM 0.466** -0.173 -0.105 -0.128
(0.224) (0.245) (0.283) (0.450)
GENER 0.189 -0.498 NAt 0.195
(0.244) (0.523) (1.029)
Log Likelihood -149.31 - 83.650 - 75.991 -29.237
Chi2 27.86 36.45 22.99 33.92
Prob > Chi2 0.0019 0.0001 0.0062 0.0002
Pseudo R2 0.0853 0.1789 0.1314 0.3672
*p < .1, **p < .05, ***p < .01
tNot applicable because this sample contains only first generation

all respondents in the Cuban, Iranian,
and Palestinian samples spoke the
homeland language, we did not include
this as a measure.
Respondents were asked how many
times they had traveled to their respec-
tive homelands in the past five years, and
this measure (NUMVIS)was used to test
the homeland visitation hypothesis. The
effect of reading periodicals in the home-
land language and keeping in contact
with relatives in the homeland were mea-
sured by employing a dummy variable
(READ)and (RELATIVE), taking a value
of one if the respondent reads/keeps in
contact and zero is s/he does not.
Education was measured by employing a
dummy variable (COLLEGE),assuming a
value of one if the respondent completed
college and zero if not.2
Our ordered probit model for each
community is: INVINT=f(ETHNAD,
ALTRUISM, READ, NUMVIS, RELA-
TIVE, READ, BUSIMP, COLLEGE,
AGE,SELFEM, GENER.) Table 3 pre-
sents the regression results for the
Armenian, Cuban, Iranian and Pales-
tinian samples.3
We found consistent support across
all four communities for the hypotheses

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 KATE GILLESPIE,LIESLRIDDLE,EDWARDSAYREAND DAVID STURGES
that altruism and perceptions of ethnic
advantage have a positive effect on
interest in homeland investment. As
hypothesized, generation and estima-
tion of business impediments proved to
be insignificant in determining interest
in homeland investment. The findings
for homeland orientation were mixed.
Little support for the homeland orienta-
tion hypothesis was found across its
three measures, and what support
emerged varied widely among the four
communities. Age and self-employ-
ment were only significant for Armenia.
Education proved insignificant across
communities (see Table 3).
CONCLUSIONSAND LIMITATIONS
The examination of homeland invest-
ment expands on the current discussion
in the international business literature
concerning the definition and opera-
tionalization of FDI in current and
future research [Brewer 1993;
Aswicahyone and Hill 1995; Hennart
1989]. As international migration and
market liberalization expand globally,
homeland investment by diaspora busi-
nesses and entrepreneurs may well
become an increasingly significant cate-
gory of foreign investment. In light of
this, our study suggests that both simi-
larities and possible differences exist
among diaspora communities as regards
interest in homeland investment.
Across all four surveyed diasporas,
members who perceive they have an
ethnic advantage in the homeland mar-
ket are more likely to be interested in
investing there than diaspora members
that do not perceive this advantage. At
a broader level, our findings concerning
ethnic advantage suggest individual-
level support of the assumption behind
the observed psychic-distance phenom-
enon: Decision makers who perceive
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that they are culturally closer to a cer-
tain foreign market are more likely to be
interested in investing in that market.
(Our findings caution, however, that as
individuals within diasporas vary on
their perceptions of ethnic advantage,
managers from the same country may
vary on their perceptions of psychic
proximity as relates to a particular for-
eign market.)
Other similarities across communities
relate to altruism and estimation of
business impediments. Our measure of
altruism proved significant, supporting
qualitative findings from our own pre-
liminary research as well as those of
Aharoni [1966]. Similarly, perceptions
of business impediments do not appear
to affect investment interest. These two
findings are potentially good news for
homelands-whether re-emerging or
repositioning states-that might be con-
sidered generally unattractive and risky
investment environments.
While behavioral measures and
demographic variables were significant
in some cases, these were not consistent
across communities. The lack of posi-
tive findings relating to self-employ-
ment except in one case supports
descriptive evidence that homeland
investment is not only of interest to the
self-employed or current entrepreneurs
but also to potential entrepreneurs as
well. Also, the insignificance of genera-
tion was as expected. However, it
should be noted that the Iranian sample
contained only first-generation respon-
dents, and the number of second-gener-
ation respondents was low for Cuba and
Palestine. For Armenia, there were ade-
quate numbers for both first and second
generation. Also, this community is dif-
ferent in that only two percent of first-
generation respondents for this group
emigrated directly from Armenia,
631
DIASPORAINTERESTIN HOMELANDINVESTMENT
unlike first generations of the other
communities who nearly all arrived
from their homelands.
It is important that we acknowledge
other limitations of the study. First,
there are limitations encompassing
issues of sample errorand generalizabil-
ity. We were unable to use sampling
frames consistent across four relatively
rare and geographically diverse commu-
nities. While this does not invalidate
similarities identified across these com-
munities, it may explain differences
among them. Also, we surveyed dias-
poras resident in the United States.
Thus, we may not be able to extrapolate
to similar communities resident in other
countries. Our sampling frames were
taken from community lists that com-
prised individuals whose ethnic identi-
ty was fairly salient [Laserwitz 1986].
This possible high level of ethnic iden-
tity in the sampling frames might affect
the overall level of respondent interest
in homeland investment. (However,
since homeland governments can most
easily contact their diasporas via com-
munity lists, an understanding of these
segments alone can be useful to them.)
The study is also limited in that it
attempts to measure investment interest
rather than actual investment. While
examining investment interest is a logi-
cal place to begin our understanding of
the homeland investment phenomenon,
it was further necessitated by the fact
that current actual homeland invest-
ment by the surveyed diasporas remains
low. While interest precedes invest-
ment, behavior evolves through the for-
eign investment process. This should
be kept in mind when comparing this
study to others that measure actual
investment.
Future research concerning the con-
cepts developed here but aimed at actu-
632
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al investors would lend insight into the
evolution of the homeland investment
process. For example, do perceptions of
ethnic advantage and altrusim affect
actual investment as they do investment
interest? Future research could also
attempt to examine the homeland
investment decision-making process
from the points of view of current entre-
preneurs versus potential entrepre-
neurs. The role of diaspora members
within multi-ethnic firms could be
explored. Do they influence FDI deci-
sions related to their homeland within
such firms? If so, how? Such research
would contribute to our understanding
of international entrepreneurship,
migration's impact on global business,
and the individual's role in the deci-
sion-making processes of the multina-
tional firm.
NOTES
1. Measures for altruism relating to
the homeland were not available in the
extant literature. We employed four
measures in our survey and examined
them in exploratory runs. Three of
these were based on statements arising
from our preliminary interviews, and
the fourth was based on reported dona-
tions to diaspora or homeland charities.
Estimated coefficients for the combina-
tions of these measures were not statis-
tically significant. The single measure
that proved the most consistently signif-
icant and interesting across various iter-
ations was the one we subsequently
employed in our model.
2. In addition to the variables
described, we controlled for income and
gender.
3. For reasons of brevity, we have
presented a single base model for each
community. Variations on each base
model were run to establish that the
JOURNAL OF INTERNATIONAL BUSINESS STUDIES
 KATE GILLESPIE,LIESLRIDDLE,EDWARDSAYREAND DAVID STURGES

results presented were not mere statisti-
cal artifice and were acceptably insensi-
tive to model specification. Also, one
might be concerned that the reason why
some of the measures are not significant
in the ordered probit results is related to
collinearity of the regressors. For the
four communities the values of the con-
dition numbers are 4.8 (Armenian), 3.6
(Cuban), 6.5 (Iranian), and 5.9
(Palestinian). Since all of these values
are less than 20, this implies that multi-
collinearity is not a serious problem
[Belsley, Kuh and Welsh 1980].
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