I need to hire good people for my software company. I have two strategies. One is to hire only people from far away so that they are removed from their friends/family/surroundings. The idea is that they will work harder that way since they don't have a social circle here. This is what investment banking companies do when hiring.

The other method would be to locate my office near a good university to draw potential hires from. Most high-tech companies in Silicon Valley seem to be following this strategy, locating their companies near Stanford.

I'm torn between the two choices. Can you guys offer some input into these thoughts?

Some background. I'm now in China and want to open a software company here to develop my web applications. The 3 cities I'm contemplating so far have been Shenzhen, Beijing, and Shanghai. From what I hear, Beijing has the 2 top universities and is considered the Silicon Valley of China (all the big American companies are there). Shanghai is more cosmopolitan. Shenzhen is also growing and has its own high-tech park.

One is to hire only people from far away so that they are removed from their friends/family/surroundings. The idea is that they will work harder that way since they don't have a social circle here. This is what investment banking companies do when hiring.

.. people only work harder when they are treated with respect and given good incentives :)

I would prefer for the second choice rather than first one as removing your employees from all social contact might create bad effect toward their work and probably they are going on leave most of the time. Either you should keep option to relocate them with their family.