See Paris and ... found a business? The impact of cross-cultural experience on opportunity recognition capabilities

Internationally mobile individuals such as migrants and expatriates exhibit a higher level of entrepreneurial activity than people without cross-cultural experience. Current research suggests that this pattern is rooted in specific resources and institutional arrangements that increase the attractiveness of exploiting entrepreneurial opportunities. In this study, we provide an additional explanation: We argue that cross-cultural experience increases the ability to recognize entrepreneurial opportunities. This argument is supported by two complementary studies – a longitudinal quasi-experiment and a priming experiment. We find convergent evidence that cross-cultural experience increases a person’s capabilities to recognize particularly profitable types of opportunities by facilitating the application of cross-cultural knowledge for the discovery of arbitrage opportunities and creative recombination.