Migrant entrepreneurs and social capital: a revised perspective

Abstract

PurposeThe purpose of this paper is to challenge the mainstream idea of “ethnically over‐socialised” migrant entrepreneurs, by embedding the concept of social capital in a framework based on economic incentives and bounded rationality. In line with previous studies which develop on the mixed embeddedness approach, this paper seeks to provide a counterbalance to models which overestimate the importance of cultural factors and ethnicity and neglect the role of economic incentives in individual behaviour.Design/methodology/approachThe study relies on 58 semi‐structured interviews with Turkish entrepreneurs, both first and second generation, conducted in Hamburg between October 2008 and January 2009.FindingsThe results present a perspective in which migrant entrepreneurs are first and foremost economic actors, who predominantly understand their ethnic social capital as a strategic, economic resource for action. The study illustrates that the phenomenon of migrant entrepreneurship can be understood only when accounting for both the external (contextual) environment and the internal limitations (search and communications costs, available information) which migrant entrepreneurs face. Within the framework of a bounded rationality approach, entrepreneurial outcomes can be viewed as a matter of optimisation under constraints.Originality/valueUntil now, a rather limited amount of studies have inquired whether and to what extent the social capital of migrant entrepreneurs can be seen as a matter of economic choice, rather than as an ethnic occurrence. By examining intergenerational changes this paper reveals the dynamic character of migrant entrepreneurship and calls for a more diversified approach when analysing this phenomenon.