Returnee Entrepreneurs and Tech Startups in India: A Study of the Determinants of their Innovation, Market Focus and Firm Performance

Abstract

In recent years, the phenomenon of returnee entrepreneurship—where individuals educated and/or employed in developed economies return to their home countries to establish new ventures—has garnered substantial academic and policy attention. Situated within the broader discourse of brain circulation, returnee entrepreneurship is increasingly recognized as a catalyst for innovation, knowledge transfer, and high-growth entrepreneurial activity in emerging markets. Against this backdrop, this doctoral thesis explores the distinctive characteristics, innovation potential, market orientation, and temporal performance of startups led by Returnee Entrepreneurs (REs) in comparison to those founded by Domestic Entrepreneurs (DEs) in the Indian context. The study is anchored in a robust theoretical framework that integrates perspectives from human capital theory, social capital theory, and international entrepreneurship. It focuses on key constructs including the unique attributes of returnee founders, the degree of innovation in their ventures, the scope of market focus (international vs. domestic), and the pace of venture evolution from inception to profitability. Drawing on primary data collected from 100 tech- enabled technology startups located across major startup hubs in India—Bangalore, Delhi NCR, Mumbai, Chennai, Hyderabad, and Pune—the research employs a mixed-methods approach. This includes descriptive statistics, binary logistic regression, Cox proportional hazards modelling, and comparative hypothesis testing. The findings underscore the strategic advantages that REs bring to the entrepreneurial ecosystem. Startups led by returnees exhibit significantly higher levels of innovation, greater international market orientation, and are more likely to pursue scalable business models. They also transition more rapidly through one of key venture lifecycle stage — stabilization — relative to those led by domestic founders. These outcomes are positively influenced by factors such as international education, overseas work and entrepreneurial experience, access to foreign capital, and the leverage of international networks. This thesis makes several important scholarly and practical contributions. Conceptually, it advances the understanding of entrepreneurial heterogeneity by juxtaposing the trajectories of returnee and domestic entrepreneurs within a unified analytical framework. Empirically, it ix offers new insights into how international exposure and cross-border experiences influence entrepreneurial outcomes in an emerging market context. From a policy standpoint, the study advocates for targeted interventions to attract and support returnee entrepreneurs. These include the establishment of diaspora engagement platforms, cross-border mentorship initiatives, and globally aligned funding mechanisms that reduce reintegration barriers and enhance the utility of transnational resources. The thesis concludes by acknowledging its limitations and proposing avenues for future research. These include examining sector-specific dynamics, tracking longitudinal firm performance, and investigating the evolving role of policy ecosystems in enabling returnee entrepreneurship in India.