We investigate the role of firms ’ country of origin in financial leverage decisions using data on foreign joint ventures in China. We hypothesize that national culture enters the joint optimization process leading to foreign joint ventures ’ leverage decisions and that it affects leverage decisions both directly and indirectly. Using cultural values of mastery and embeddedness to explain country of origin effects, we find that mastery has negative and significant direct effects on foreign joint ventures ’ leverage and short-term debt decisions, and a positive and significant direct effect on the likelihood of foreign joint ventures’ having long-term debt. The indirect effects of mastery on leverage decisions sometimes reinforce and

Ethnic Scientists and Foreign Direct Investment Placement. " The statistical analysis of firm-level data on U.S. multinational enterprises was conducted at the Bureau of Economic Analysis, U.S. Department of Commerce, under arrangements that maintain legal confidentiality arrangements. The views expressed herein are those of the authors and do not reflect the official positions of the U.S. Department of Commerce. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

Focusing exclusively on foreign direct investment (FDI) as a comparative measure of capital infl ows obscures another signifi cant source of funds—that of monetary remittances. This article emphasizes the empirical and analytic value of disaggregating FDI data and analyzing remittance trends in the two most populous developing countries in the world, China and India. While identifying the determinants of FDI infl ows dominates much of the literature on FDI, this article suggests that the concept of FDI may not be the most meaningful indicator of relative developmental performance, especially given the reality of national defi nitional differences in FDI, roundtrip capital, growth in portfolio investment and variation in the sources and uses of realized FDI. In this context, the article examines what motivates the respective diasporas to send money back to their homelands in the form of FDI versus remittances and the local developmental implications of these diasporic fl ows. It proposes that attending to vernacular modes of capital formation such as ethnic and transnational networks presents an analytic opportunity to generate more empirically accurate and nuanced theories of political economy. As China and India have become increasingly active in the global political economy, they have also become major destinations of foreign direct investment (FDI) and international migrant remittances. Observers comparing the two economies, however,

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Abstract: We examine the role of the Indian diaspora in the outsourcing of work to India. Our data are taken from oDesk, the world’s largest online platform for outsourced contracts. Despite oDesk minimizing many of the frictions that diaspora connections have traditionally overcome, diaspora connections still matter on oDesk, with ethnic Indians substantially more likely to choose a worker in India. This higher placement is the result of a greater likelihood of choosing India for the initial contract, due in large part to taste-based preferences, and substantial path dependence in location choices. We further examine wage and performance outcomes of outsourcing as a function of ethnic connections.

This paper studies the impact that ethnic innovators have on the global activities of U.S. …rms by analyzing detailed data on patent applications and on the operations of the foreign a ¢ liates of U.S. multinational …rms. The results indicate that increases in the share of a …rm’s innovation performed by inventors of a particular ethnicity are associated with increases in the share of that …rm’s a ¢ liate activity in countries related to that ethnicity. Ethnic innovators also appear to facilitate the disintegration of innovative activity across borders and to allow U.S. multinationals to form new a ¢ liates abroad without the support of local joint venture partners.

This paper studies the impact that ethnic innovators have on the global activities of U.S. firms by analyzing detailed data on patent applications and on the operations of the foreign affiliates of U.S. multinational firms. The results indicate that increases in the share of a firm’s innovation performed by inventors of a particular ethnicity are associated with increases in the share of that firm’s affiliate activity in countries related to that ethnicity. Ethnic innovators also appear to facilitate the disintegration of innovative activity across borders and to allow U.S. multinationals to form new affiliates abroad without the support of local joint venture partners. Key words: foreign direct investment; technology transfer; patents; innovation; research and development; ethnic networks; diasporas

Abstract: We examine the role of the Indian diaspora in the outsourcing of work to India. Our data are taken from oDesk, the world’s largest online platform for outsourced contracts. Despite oDesk minimizing many of the frictions that diaspora connections have traditionally overcome, diaspora connections still matter on oDesk, with ethnic Indians substantially more likely to choose a worker in India. This higher placement is the result of a greater likelihood of choosing India for the initial contract and substantial path dependence in location choices. We further examine wage and performance outcomes of outsourcing as a function of ethnic connections. Our examination of potential rationales for the greater ethnic-based placement of contracts assesses taste-based preferences and information differences.

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on this work. Funding for this project was provided by World Bank and Multi-Donor Trade Trust Fund. Kerr and Stanton were paid short-term contractors of the World Bank for this project. The views expressed here are those of the authors and not of any institution they may be associated with, nor of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.