Ethnic Firms Research Articles

Ethnic chambers of commerce and co-creation of value: a synthesis of cultural and networking competencies

PurposeThe purpose of this paper is to explore and understand how Chambers of Commerce enhance networking among ethnic small businesses and enable the co-creation of value. This study contributes to extant research through the emergence of the concept of cultural networking competence. This study highlights how Chambers of Commerce in the USA ensures the continuation, growth and replication of ethnic small businesses through cultural networking competence.Design/methodology/approachThis study investigates the research question by conducting qualitative research and adopting an interpretive approach of investigation in the Hispanic Chamber of Commerce in Chicago. Subjects were recruited using purposive sampling techniques via community links.FindingsFindings show the existence of four different types of value in line with Holbrook’s typology of value – utilitarian, social, emotional and altruistic value. Because these values are culturally related, this study regards these values as cultural networking competence, which differs from general networking competence due to its focus on culture. With cultural networking competence, ethnic firms benefit from access to new domains, the creation of new opportunities, an improved effectiveness in achieving objectives beyond their own ethnic networks and the resources of other actors that can be leveraged for wider impact.Originality/valueThis study contributes to extant research through the emergence of the concept of cultural networking competence. This study highlights how Chambers of Commerce in the USA ensures the continuation, growth and replication of ethnic small businesses through cultural networking competence.

Culture values and entrepreneurial innovativeness: A comparative study of Malaysian ethnic entrepreneurs

ABSTRACT Countries are often characterized with a diverse set of subcultures, exerting different impacts on innovation among different ethnic groups. This article comparatively analyzes how national culture, as measured by Hofstede's six cultural values, influences the entrepreneurial innovativeness (EI) of three Malaysian ethnic firms (Malaysian Chinese, Indian, and Malays). Based on a systematic investigation of survey data of 450 small to medium-sized firms (SMEs), we find positive influences of indulgence, collectivism, and low power distance on EI among the three ethnic entrepreneurs in Malaysia. Our study also finds that three other cultural values have a differential impact on Malaysia’s ethnic groups. While long-term orientation exerts a significant impact on Malaysian Chinese, masculinity and low uncertainty avoidance have significant but (surprisingly) opposite impacts on the three ethnic entrepreneurs. These similar and different impacts of cultural values on EI among different ethnic groups generates significant theoretical and practical implications.

Orientação de Mercado para Pequenas e Médias Empresas de Imigrantes Brasileiros no Exterior

Objetivo: contribuir para o campo de estudo do empreendedorismo, no contexto das empresas étnicas ou de imigrantes, ao analisar variáveis que definem sua orientação de mercado e as decisões estratégicas tomadas, aprofundando o conhecimento sobre o assunto.Método: foi utilizada a coleta de dados com estratégias multimétodos (quantitativa e qualitativa), sendo sua principal estratégia a entrevista em profundidade, que compõe a análise de múltiplos casos de empreendedores no exterior, oriundos de diferentes comunidades brasileiras. Essas informações foram trianguladas, a partir de dados de surveys realizadas com brasileiros na Austrália, no Canadá, em Portugal e na Estônia, da netnografia e da análise documental. Sendo assim, análises intra e intercasos foram feitas, visando encontrar similaridades e diferenças nos resultados alcançados.Originalidade/Relevância: o artigo enfoca uma importante questão, que envolve as grandes economias mundiais – os imigrantes. Dadas as dificuldades em sua inserção nas sociedades acolhedoras, eles tendem a ser identificados como “problemas sociais”. Por outro lado, a aplicação de modelos de negócios e de propostas de orientação mercadológica para empreendedores imigrantes, viabiliza um caminho para a sua ascensão econômica e social. Ao se tornarem empreendedores bem-sucedidos, eles podem reverter essa percepção discriminatória a seu respeito.Resultados: com base nos dados coletados, bem como na análise de artigos da literatura existente, foram identificadas quatro orientações diferentes de mercado: (1) foco no nicho de mercado étnico, (2) foco em interesses específicos, (3) foco em produtos exóticos para o cliente local, e (4) foco em mercados altamente competitivos. Uma matriz 2 x 2 é apresentada, incluindo as variáveis: (a) grau de afiliação de empreendedores com suas comunidades étnicas e seu público-alvo, e (b) segmentos de mercado enfocados.Contribuições teóricas/metodológicas: uma das principais contribuições teóricas deste artigo é apoiar a discussão sobre a orientação para o mercado de imigrantes, os empreendimentos étnicos e as decisões do público-alvo a ser atendido. Além disso, o artigo inova, ao discutir decisões estratégicas, no contexto de pequenos e médios negócios de brasileiros no exterior.

Market orientation and strategic decisions on immigrant and ethnic small firms

Entrepreneurial orientation in small ethnic firms is embedded in a strong sociocultural environment, which influences their market orientation. For this reason, entrepreneurs choose between either focusing their businesses on their ethnic communities or attracting mainstream customers from outside their ethnic enclave. The article aims to contribute to the knowledge of ethnic and immigrant firms by taking a detailed look at their marketing orientation and strategic decisions. To perform this study, the researchers used a multi-method qualitative data collection, including the analysis of different entrepreneur cases, within several Brazilian communities overseas, which illustrate four different marketing orientations of ethnic entrepreneurs: (i) “focus on the ethnic niche market,” (ii) “focus on specific interests,” (iii) “focus on exotic products for the mainstream customer,” and (iv) “focus on highly competitive markets.” Authors draw a 2x2 matrix as an output of the research.

Efficiency of trade credit and bank finance: an ethnic minority area in China

Using 1998–2008 firm-level microdata for industrial firms, we investigate the efficiency of financial intermediation through trade credit and bank loans in an ethnic minority area in China, the Xinjiang Uygur Autonomous Region. We find: (1) after receiving trade credit, ethnic minority firms tend not to repay it when they are financially distressed; (2) bank finance allocates more funds to more efficient ethnic minority firms while also allowing state-holding Han firms with worse performance levels to access bank loans; (3) efficient financial intermediation to ethnic minority firms is achieved through bank loans to relatively large firms.

Beyond the enclave? Break-outs into mainstream markets and multicultural hybridism in ethnic firms

The literature on immigrant entrepreneurship has richly described the characteristics and peculiarities of ethnic businesses catering to enclave markets. However, several indications suggest that immigrant-owned firms are increasingly entering mainstream markets and changing both their internal structures and their external networks with resource providers. One of the most substantial changes, which has been overlooked by researchers, consists of the appearance of what we define as ‘multiculturally hybrid firms’, which are firms that rely on inter-ethnic managerial or labour resources to carry out their activities. Therefore, in this paper we provide an understanding of the variables that affect the recourse to solutions of multicultural hybridism in the entrepreneurial teams and personnel of immigrant-owned firms. We conduct our empirical analyses on data collected through interviews on a sample of 130 immigrant entrepreneurs in Italy. Our results show that multicultural hybridism is mainly driven by the size of the founding team, the business's maturity, the entrepreneurs' host-country language competence and by entrepreneurs' motivation by individual goals rather than community goals. This research advances our knowledge about immigrant entrepreneurship by focusing on firm-level dimensions such as the diversity of entrepreneurial teams and employees, which are increasingly relevant in our multicultural societies.

How location and ethnicity affect ethnic entrepreneurs in three Canadian cities

AbstractFew studies on the entrepreneurial contributions of immigrant and/or ethnic entrepreneurs have been carried out in Canada. This article presents results from a cross‐Canadian project. Data were collected from 718 entrepreneurs in three cities. Analysis of the socio‐demographic profile suggests that ethnic entrepreneurs pursue different paths of integration. Firm characteristics suggest that similar support programs are needed for ethnic firms as for all small firms. Also, our analysis suggests that there is no need for new support programs for ethnic firms, except to help them better integrate. Lastly, the use that these entrepreneurs make of social capital only partially confirms the literature. © 2010 Wiley Periodicals, Inc.

THE EFFECTS OF ETHNICITY, FAMILIES AND CULTURE ON ENTREPRENEURIAL EXPERIENCE: AN EXTENSION OF SUSTAINABLE FAMILY BUSINESS THEORY

Entrepreneurs have been traditionally epitomized as rugged individuals garnering creative forces of innovation and technology. Applying this traditional, limited, and narrow view of entrepreneurship to ethnic firm creation and growth is to ignore or discount core cultural values of the ethnic contexts in which these firms operate. It is no longer possible to depend solely on human capital theory and household characteristic descriptions to understand the complex and interdependent relationships between the ethnic-owning family, its firm, and the community context in which the firm operates. This paper addresses the complex dynamic of ethnic firms with three purposes: (a) to provide a cultural context for the three ethnic groups composing the National Minority Business Owner Study; (b) to extend the Sustainable Family Business Theory, a dynamic, behaviorally-based, multi-dimensional family firm theory, by clarifying how it accommodates ethnic firm complexities within their cultural context, and (c) to derive implications for research, education and consulting with worldwide applications.

Does Ethnicity Pay? Evidence from Overseas Chinese FDI in China

Using a comprehensive sample of all FDI firms in China, we explore the question whether ethnicity enhances operating performance. While there has been a sizable theoretical literature studying ethnicity and foreign investments, the prediction of the impact of ethnicity on firm profitability is far from clear. We demonstrate empirically that ethnic firms do not command an operational advantage over non-ethnic firms in the overall sample. Further tests suggest that while ethnic firms command an operational advantage over nonethnic firms initially, such advantage declines over time. We then explore what might have caused the decline of the ethnic advantage, and our results suggest that lack of investment in intangible and human capital by ethnic firms is driving the pattern we observe. Overall, our results suggest that ethnicity does not pay or that ethnicity does not confer a permanent operating advantage on a firm.

Composing a database of minority enterprises in Scotland

PurposeTo address the issue of the low take‐up of available ethnic business support the article proposes the composition of a database for Scotland, thereby providing baseline data on minority businesses and hence providing a sampling frame for future research. The database will hold the following information: name and gender of the business owner, sector, location, number of employees as an indicator of company size, generation, the year in which the business was established, as well as the legal form of ownership of businesses.Design/methodology/approachThe database draws from the concept of mixed embeddedness as well as the political agenda of the Scottish Executive for the sector. Data sources used are commercial databases, the Yellow Pages of Scotland, local business registers across Scotland, a telephone survey and personal contact/networking with businesses.FindingsIn order to facilitate the composition of a Scottish database of minority businesses, this article has looked at existing theories of minority business support and issues currently considered in the literature. Based on the literature underpinning research on ethnic minority firms, a justification for the proposed database has been developed, which provides a sampling frame in the Scottish context and allows for new approaches to research.Research limitations/implicationsThough 100 per cent coverage of minority businesses in Scotland is a desired target, complete coverage may not be achievable. Some business might simply not be interested in participating in the research and cannot, therefore, be included in the database despite the multi‐facet methodology applied.Originality/valueBy proposing a methodology for composing the database, the article tackles a long‐standing issue in the area of ethnic business research. It is hoped that the database will improve understanding among policy makers and support organisations, in terms of the particular needs of individual businesses. Consequently, the better understanding should account for a more tailored and more attractive support, which, in turn, improves the take‐up of existing mechanisms.

The impact of ethnic-religious identification on buyer-seller behaviour: a study of two enclaves

This study examines the behaviour of buyers and sellers in two ethnic enclaves, Catholic Hispanics and Muslim Arabs, within a US metropolitan area. Based upon a sample of 42 small ethnic businesses, a rudimentary activity matrix is constructed for each enclave to reveal the purchases of materials, services, and labour and the sales of finished and semi-finished goods and services. Results suggest that ethnic firms are dependent on co-ethnic business in their enclave, tend to rely more upon the ethnic enclave for labour inputs than for other resources, and that start-up firms rely more on intra-enclave economic exchange than do more mature ethnic firms. The perceived advantage of intra-enclave buying and selling is argued to lie in a sense of ethnic identification that comes primarily from a religion, either Catholic or Muslim, common to each enclave. The dependence on religious organisations for services by new ventures is seen to lessen as the venture matures.

A Tale of Three Tomatoes: The New Food Economy in Toronto, Canada

Drawing upon research from a cluster and innovation systems perspective, we counter the argument that the food industry is a mature and dying industry and point to evidence of a vibrant, dynamic food sector that has made a substantial contribution to regional growth. Since the mid-1990s, the most dynamic component of the Toronto urban food economy has been the small- and medium-sized enterprises, comprised mainly of specialty, local, ethnic, and organic food-processing firms that are thriving in response to consumers’ demands for high-quality, local, fresh ethnic and fusion cuisine. However, these newer firms face challenges, and our results raise the question about how a more stimulating innovative milieu can be created for them. In answer to this question, we suggest multiscaled approaches to cluster formation and policy and discuss the implications of our research for theories of innovation systems, firms, city creativity, and governance. We situate this “new food economy” within the core literature of economic geography, seeking to relocate the “agrifood” literature away from a traditional rural setting to a dynamic city-region context, underscoring the essential role of the consumption side of agrifood chains. Moreover, we use the food sector as a lens through which to argue that mature sectors and “ordinary” activities in a city are every bit as important to the long-term health, viability, and sustainability of a city-region economy.

The take-up of business support by minority ethnic enterprises: The experience of South Asian businesses in England

This research contributes to a greater understanding of minority ethnic business (MEB) needs and practices and helps identify the support needs of minority ethnic firms in relation to existing support provision. The aims are, therefore, to examine the take-up of support by minority ethnic enterprises focusing mainly on the South Asian community with some representation from the African-Caribbean and Korean communities. Fifty minority ethnic businesses across South West London were contacted and semi-structured interviews took place with the owner/owner managers. The findings suggest that policy makers need to appreciate the diversity of MEBs and policies aimed at these businesses should reflect that diversity.

Patterns of Trade in Ethnic Enclaves: A Study of Arab and Hispanic Small Businesses

This study examines the nature of intra-enclave trade for two ethnic enclaves, Hispanics and Arabs, within a U.S. metropolitan area. Based upon a sample of forty-two small ethnic businesses, a modified enclave input-output table is developed for purchases of materials, services, and labor inputs and sales of outputs. Analysis suggests that ethnic firms tend to rely more upon the ethnic enclave for labor inputs than for other resources. In addition, the study indicates that start-up firms rely more upon intra-enclave economic exchange than more mature ethnic business.

Meeting the needs of different ethnic firms’ export information requirements: an exploratory study

This study provides empirical data concerning the perceived usefulness of sources of export information together with types of information required by Asian and indigenous1 (white) owned small and medium-sized enterprises (SMEs) in the UK. Findings are based on an exploratory investigation involving personal interviews and the t-test procedure is employed to establish that statistical differences exist between the groups of firms in relation to both their perceived usefulness of a number of sources and types of information required. The findings also suggest that certain organizations and especially libraries are rated low by managers in relation to their usefulness in supplying this information.

Enterprise support and ethnic minority firms

Encouraging ethnic minority communities into business has been an implicit feature of the small firm policy agenda since the 1980s. However, comparatively little is known of the views of those directly involved in providing enterprise development support. This subject is addressed here through a study on the experiences of those engaged in the ‘front‐line’ provision of such support to ethnic enterprise. Drawing on qualitative interviews with 22 key informants in four British cities ‐ Birmingham, Liverpool, London and Manchester ‐ data relating to organisational objectives, funding, service delivery, and networking, are presented. The results highlight significant constraints upon the delivery of effective enterprise support. First, there was a lack of basic data on the make‐up of local ethnic minority firms. Second, the rationale for interventions was often unclear; were they to promote competitive advantage, economic development or equality of opportunity? Third, the funding regimes of support agencies generated what was seen as unhealthy competition, and militated against effective networking. Fourth, ‘effectiveness’ was often equated with meeting contractual requirements rather than business needs. Finally, many officers perceived themselves as marginal in comparison with better resourced ‘mainstream’ providers.

Finance for SMEs: A U.K. Perspective

This paper provide an overview of recent trends in the financing of smaller businesses in the U.K. It refers in particular to the findings of a major recent programme of work in this area funded by the Economic and Social Research Council, in which the author participated. This programme included the first national survey to address these issues since the Bolton Report of 1971, as well as a range of projects covering the finance of ethnic businesses and hi-tech firms as well as the market for informal venture capital. On the basis of this work and of the results of more recent follow up surveyors it is concluded that the evidence for general equity or debt gaps in the U.K. is weak. If anything SME funding was too easy in the boom of the late 1980s. It is argued that consideration could be given to the promotion through seedcorn funding of SME co-operative or mutual guarantee schemes to reduce information asymmetry in U.K. credit markets.

Broadening the enclave debate: The labor market experiences of Dominican and Colombian men in New York city

This article provides new data on immigrant employment in ethnic firms, in an attempt to go beyond the terms of the ethnic enclave debate as it has developed so far. We contend that enclave research has focused too narrowly on wages. Using data from a survey of Colombian and Dominican immigrants in New York City, we compare enclave, primary, and secondary workers on three types of work-related resources: wages, opportunities for skill acquisition, and access to nonmonetary fringe benefits. We find little evidence that Dominican and Colombia men in the enclave comprise a protected labor market sector. On the contrary, they are disadvantaged with respect to several fringe benefits.

The Turkish Economy in West Berlin

Jochen Blaschke is on the staff of the Political Science Department in the Free University of Berlin. Ahmet Ersbz is a research officer working within the research programme "The Turkish economy in Berlin". Turkish immigration to Berlin originally took the form of 'guestworkers' taking posts in industry as contract labour but not families are settled there. Up to 3,000 businesses have emerged within the community, mostly in retailing and catering but also in crafts and services. The study focuses on a small area within Kreuzberg and on the food distribution trade. Those starting in business have to give evidence of a long period of residence and proficiency in the trade they wish to practise. Much of the start-up capital and almost all employees come from within the community. The labour of wives and children gives flexibility to the business at low cost. Few firms are run by women. Children brought up in Berlin but with little relevant training are taking increasing responsibility. Turkish firms have largely served the needs of the Turkish community but are providing cheaper and more novel goods to the German population too. Competition is mainly with other ethnic firms. There is little previous experience of business. Small business provides financial independence for Turks marginalised by economic restructuring. The Turkish economy is seen as a transitional phenomenon. Future prospects are uncertain.