Purpose The purpose of this study is to identify the effect of ethnic networks on firms’ location decisions using social network theory and the homophily principle. Design/methodology/approach A traditional gravity model is used on a sample composed of high-skilled and low-skilled ethnic networks and multinational enterprises (MNEs) from Latin America, North America and the European Union. Findings Contrary to findings of previous studies, ethnic networks do not appear to influence location decisions of Latin American firms expanding into countries from North America and the European Union. This might be because of weak ethnic connections among the players. Practical implications Managers must be aware that ethnic networks not always can be used for the strategy of the firm, at least regarding location. Social implications Governments and entrepreneurial and immigrant associations from home and host countries could develop initiatives addressed to strengthening the links between the members of the networks. Originality/value This study extends the social network theory in the sense that ethnic networks do not always positively affect firms’ location. Moreover, it is important to consider the specific context or features of the members of a network before analyzing its effects on firms’ location.

Purpose The purpose of this study is to identify, based on social network theory, the relationship between the direction of international migration (immigration/emigration) and the international movement of enterprises and their location. Design/methodology/approach A traditional gravity model and the Tobit estimation method are applied to three groups of countries from three different regions: Latin America, North America and the European Union. The study considers a period from 2001 to 2012. Findings The main results suggest that the international migration that goes from the European Union and North America to Latin America is related with the firms’ internationalization and their respective location. Practical implications Given that migration can be an important and reliable source of information, trust and knowledge, managers should see it as a “bridge” between the home and host countries, which, in turn, can increase their competitive advantage. Social implications Governments can learn how migration and outward foreign direct investment interact. In addition, they could develop political frameworks to accurately and effectively manage international migration (immigration and emigration) and FDI in the best interests of the stakeholders. Originality/value This study extends the social network theory by suggesting that networks are not only related with firms’ expansion abroad but as well with their location. This statement could be generalizable as long as emigration/networks (ethnic ties) are considered the links between the home and the host country.

Purpose The purpose of this paper is to identify how the cultural attributes of ethnic networks affect foreign direct investment (FDI) location. Design/methodology/approach The study tests on panel data the effect of ethnic networks in interaction with their member’s cultural attributes on FDI location. Findings 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. Originality/value 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.

The purpose of this paper is to analyze salient political risks common in Latin America identifying the contexts in which they take place and the reasons for their recurrence, insofar as they affect international business investors in this region. Through a comparison of past and present political patterns in Latin America, this study assesses political risk traps, or combinations of repeatedly unforeseen political risks that international businesses may encounter in Latin American countries. The article identifies eight critical questions that investors must address looking at political risks in Latin America, as political situations faced by Latin American countries tend to be similar throughout time. It also shows the combination of political risks factors leading to a particular political risk configuration in the region. Political risks in Latin America appear over and over again because of enduring, vested interests of entrenched power groups in Latin America. Current techniques and methods to forecast country political risk are insufficient for international investors to grasp the full range of risks they may confront while investing in Latin America. Previous literature has not analyzed political risk combination and recurrence in an integrative approach. Therefore, the originality of our article is to present a framework of political risks, with a specific application to Latin America, highlighting the specific reasons for their recurrence there.

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