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How do diaspora-embedded transnational founders shape host entrepreneurial ecosystems when formal home-host institutional channels are closed rather than merely costly? Drawing on international business theory on institutional escape and arbitrage, this question is addressed through an inductive, theory-building multiple case study of 14 Iranian-origin founders operating ventures in Canada, a setting of institutional severance. The study identifies institutional translation and bidirectional legitimacy conversion as founder-level connector practices that make cross-field resources intelligible and usable. Repeated acts of vouching, referral, and mentoring contribute to diaspora-linked relational subcommunities that can provide a substrate for formal support infrastructure. Institutional severance fosters portable regulatory-routing capabilities, while perceived non-recoverability may strengthen commitment to the host context and readiness to occupy ambiguous connector roles. The analysis develops a cross-level theory showing how individual-level institutional arbitrage contributes to diaspora-linked relational infrastructure within host ecosystems. In doing so, the article advances international business, ecosystem theory, and migrant-entrepreneurship policy.
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Freiling et al. (2026) studied this question.
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