Ethnic community involvement, entrepreneurial social capital, and business performance

Abstract

Ethnic or immigrant social networks tend to influence the type of business that an ethnic entrepreneur starts, as well as the success or failure of the business. In this paper, we develop a theoretical model that proposes that ethnic community involvement influences the configuration of ethnic community-based entrepreneurial social capital which, in turn, influences ethnic business performance. In addition, the relationship between ethnic community-based social capital and business performance is proposed to be moderated by two micro-level constructs – entrepreneur characteristics (education level, business experience, and language fluency) and business characteristics (age and ownership) – as well as by two macro-level constructs, ethnic community characteristics (community social capital and community resources) and societal forces (economic, political, legal/regulatory, and industry). This model can help promote a better understanding of ethnic enterprises and make a contribution to the development of improved approaches for the promotion and growth of such businesses.