Ethnicity and the role of the founders' human and social capital in technology-based ventures

Abstract

PurposeThis study examines the social and human capital of successful Arab and Jewish technological entrepreneurs in Israel, and explores how human and social capital differ between technology-based industries.Design/methodology/approachA quantitative study was conducted using a sample of 1,184 technology-based ventures from two technology-based industries—life science (LS) and information technology (IT)—that were founded by Jewish and Arab entrepreneurs.FindingsThe results show that in the LS industry, successful Arab entrepreneurs possess higher human and social capital compared with Jewish entrepreneurs. However, in the IT industry, the Jewish entrepreneurs possess higher human and social capital. These findings reflect the deeper entrepreneurial challenges and opportunities regarding ethnic entrepreneurs' ability to break through technology-based industries. Future research directions are provided.Originality/valueThis study makes two contributions to the theoretical understanding of ethnic entrepreneurship and technology-based ventures. First, this study focuses on the impact of human and social capital on economic growth in the context of technological entrepreneurship in technology-based industries, since the ethnic entrepreneurship literature has mainly focused on traditional industries. Second, this study examines the effect of the founders' ethnicity, and explores how human and social capital factors vary across industries due to their specific contextual characteristics.