Analyzing the influence of social capital on self-employment: a study of Chinese immigrants

Abstract

This paper studies the influence of social capital on immigrants’ self-employment, differentiating between structural, relational and cognitive social capital. The paper has a particular focus on Chinese immigrants and explores the effects of the so-called guanxi, a specific form of social capital for Chinese communities. The empirical research is based on a survey conducted in 2012 among Chinese immigrants in Andalusia (Spain) in which both business owners and paid employees were interviewed. A logistic regression specification was employed to test the hypotheses. The results show that the Chinese immigrants with greater structural and relational social capital and better ‘guanxi’ are more likely to become business owners. On the contrary, cognitive social capital seems to favor the option for paid employment versus the option for self-employment among Chinese immigrants. However, in the specific case of the Chinese immigrants who have a business owner in their family, the cognitive social capital also has positive effects on self-employment.