Investment across borders: How diaspora firms weigh financial returns and emotional-social drivers

This article examines how material and non-material motivations jointly shape diaspora firms’ investment decisions. Using novel survey data from over 100 Korean diaspora firms across more than 30 countries, we analyze preferences under varying financial return scenarios between Korea, the U.S. and China. We find that non-material motivations promote homeland investment interests when expected returns are comparable, but not when Korea offers lower returns, supported by interviews with 12 firms. Moving beyond isolating material or non-material motivations, we highlight that non-material motivations complement, rather than replace, profit-driven considerations. Policymakers should offer competitive economic incentives before leveraging emotional and social appeals.