No place like home: The effect of exporting to the country of origin on the financial performance of immigrant-owned SMEs

Immigrants and sustained international migration are transforming developed Western countries at an unprecedented pace and scale. Sustained international migration is also further accentuating the already-dominant presence of immigrant entrepreneurs in the international business landscape. These immigrant entrepreneurs often operate small and medium-sized enterprises (SMEs) that primarily export to their country of origin. However, conflicting findings suggest theoretical ambiguity in how the level of country-of-origin export intensity influences the SMEs’ financial performance. Adopting a contingent perspective, we theorize how and when socially embedded immigrant owners derive superior performance from high country-of-origin export intensity. Based on a sample of 2584 immigrant-owned SMEs and 6391 firm-year observations, we find that SMEs led by immigrant owners with longer stays in their country of residence and whose country of origin is geographically proximate to their country of residence generate superior financial performance from high country-of-origin export intensity. These findings are consistent with the view that immigrant entrepreneurs’ international financial success is a function of network- and cognition-based advantages linked to their level of concurrent embeddedness in their countries of residence and origin. We also provide actionable insights for immigrant entrepreneurs and for policy-makers tasked to design suitable export promotion programs.