What?
Sorry but that makes no sense to me. There are good developers and bad developers. Doesn't matter where they're from.
If you're talking about "understanding of the market" that has nothing to do with development. Might make a difference if you want the 1 man startup kind of person, but still, that has nothing to do with actual development. I sincerely don't understand how you can equate lack of knowledge of a local market with writing code that doesn't scale.
Hiring developers for their understanding of the market sounds to me like you're not in need of a developer. Even then, once a good developer gets into a specific market he'll learn it just like a local developer would.
For some anecdotal evidence, I've never set foot outside of my country (Brazil) and worked with very few US developers that are in the same ballpark as me. I've met people from the Philippines, Greece, Sweden and many other countries that are better. Country is a non-factor.
IMO being a good developer has nothing to do with the zip code you were born in. People become good developers if they're invested in it and work on it. Maybe you're a tad better if you were born with the right genes, but 99% of it is self-improvement.