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Abstract Using novel survey data, we examine the relationship between returnee entrepreneurs, multinational enterprise (MNE) work experience of domestic entrepreneurs, and firms' innovation performance in high‐tech SMEs in China. We adopt an integrated framework that combines the knowledge‐based view and social capital theory to investigate whether human mobility across national borders and MNE work experience facilitate international knowledge spillovers. We find that firms founded by returnees are more innovative than their local counterparts. We also find that returnee firms have an indirect impact/spillover effect on non‐returnee firms' innovation performance and act as a new channel for technological knowledge spillovers. The findings show that the presence of a technology gap positively moderates the effect of returnee spillovers on non‐returnee firms' innovation performance, but the impact of MNE work experience on local innovation is constrained by the technology gap. Our results extend the existing literatures on knowledge spillovers and strategic entrepreneurship and have important managerial and policy implications. Copyright © 2010 Strategic Management Society.
Liu et al. (Wed,) studied this question.