Immigrant-owned Businesses Research Articles

Business networks at start-up: Swedish native-owned and immigrant-owned companies

The aim of this study is to examine the differences between native Swedish and immigrant entrepreneurs' business networks at start-up stage. The study is based on a database consisting of 261 immigrant- and 2,463 native-owned companies, applying several univariate and multivariate statistical methods. Immigrant entrepreneurs' business networks are less likely to include mainstream contacts at the start-up stage than native born entrepreneurs. Thus, ethnicity is an important variable explaining differences in such networks at the start-up stage. A combination of both mainstream and immigrant networks has the potential to give rise to more growth for immigrant-owned businesses. As a result, these businesses may have potential to create new jobs for unemployed immigrants. This study provides a deeper understanding of how ethnicity may influence the entrepreneurs' use of business networks. It may lead to policy makers considering access to mainstreaming networks as an important issue in the social and economic integration.

Do young firms owned by recent immigrants outperform other young firms?

This study compares the performance of new businesses owned by recent immigrants with that of other new firms. It addresses an on-going unresolved discussion in the academic and professional literatures by drawing on a large sample of Canadian business owners whose firms began trading between 2000 and 2004 and using taxation data to track 2004 to 2008 performance. The results provide empirical evidence that young immigrant-owned exporter firms outperformed young domestically-founded firms whether or not they exported; however, immigrant-owned young enterprises that did not export underperformed other young firms. Owner-level factors such as gender, growth intentions and experience also influenced growth performance among young SMEs. The results provide evidence that suggests that immigrants have resources such as access to international networks that provide competitive advantage over non-immigrant owners that export or aspire to export. Not all immigrant business owners, however, are able to lever such advantages. The implications of the findings for research and policy are discussed.

The Motivations and Obstacles to Immigrant Entrepreneurship in South Africa

This study investigates the motivations and obstacles to immigrant entrepreneurship in South Africa. 101 immigrant entrepreneurs participated in the survey and a self-administered questionnaire was employed in gathering data from African-immigrant entrepreneurs operating in selected cities (Alice, King Williams Town, East London and Port Elizabeth) in the Eastern Cape Province of South Africa. The respondents were selected using the simple random sampling method. Statistical analysis included descriptive statistics and the principal component analysis. The results indicate that immigrant entrepreneurs employ both native and immigrants. The r esults furthermore indicate that immigrant entrepreneurs are driven into entrepreneurship by both push and pull factors. Employment (a push factor) is the most important trigger. The results also indicate that the obstacl es to the performance of immigrant-owned businesses include finance, weak markets, human capital and lack of support. In addition, networking by immigrant is limited to co-ethnics and most immigrant entrepreneurs are not members of regional chambers of commerce. The study gives recommendations on how immigrant entrepreneurs, commercial banks and government can improve immigrant entrepreneurship in South Africa.

Do immigrant-owned businesses grow financially? An empirical study of African immigrant-owned businesses in Cape Town Metropolitan Area of South Africa

Given the fact that numerous challenges prohibit African immigrants from availing financial capital for the purpose of starting a business in South Africa, this paper sets out to investigate whether those that succeeded experienced a significant increment in their financial capital three or more years after start-up. This paper was designed within the quantitative and qualitative research paradigms. A triangulation of three methods was utilised to collect and analyze the data. From a quantitative perspective, the survey questionnaire was utilised. To complement the quantitative approach, personal interviews and focus groups were utilised as the methods within the qualitative approach paradigm. The primary data collection instrument used was the survey questionnaire which was complemented by personal interviews and focus group debates. The results revealed that the majority (71.1%), of African immigrants had an estimated start-up financial capital in the range of R 1 000 and R 5 000, which tended to vary across the different ethnic groups studied. After three or more years, the estimated financial capital of the majority (39.3%) of the respondents moved to a new range of R 50 001 - R 100 000. Noting a disparity in capital growth exhibited by the different ethnic groups, it was found that all the Ethiopians who started with a capital within the range of R1 000-R5 000 moved into a new capital range (R50 001- R100 000) three or more years after business start-up. Although, the absolute migration in terms of capital demonstrated by the Ethiopian is not into the highest capital range, they were nonetheless the only country that experienced this phenomenal growth. In terms of occupying the highest capital range (R250 001- R500 000) 11.1% of Cameroonians moved into that range followed by 7.4% of Somalians. Using an increase in financial capital (generated by ploughing back profits) as a proxy for growth, we were able to prove that these African immigrant-owned business grow and the rate of growth varied across the different ethnic groups studied. Key words: Immigrant entrepreneurship, immigrant-owned businesses, financial capital, financial growth, African immigrants, business start-up resources and South Africa.

Financing the start-up and operation of immigrant-owned businesses: The path taken by African immigrants in the Cape Town metropolitan area of South Africa

Drawing a sample of 135 successful African immigrant-owned businesses, this paper sets out to investigate how their owners acquired the necessary capital for start-up and growth thereafter. The paper was designed within the quantitative and qualitative research paradigms, in which a triangulation of three methods was utilised to collect and analyse the data. The paper revealed that although African immigrants are characteristically at the disadvantage when it comes to accessing capital from formal financial institutions, this does not stop them from pursuing entrepreneurial activities. At the start-up stage, they typically resort to personal savings, business credit, family credit, and loans from informal financial institutions. According to the ability to raise capital, we found that a varying range of start-up capital was utilised, which tended to vary across the different ethnic groups studied. Once started, we found that the sources of additional finance available to these immigrants did not change significantly. They conventionally turned to friends, co-ethnics and self-help financial associations to ‘feed’ their need for further funding.

The store in the hood: a century of ethnic business and conflict

Preface Acknowledgments Chapter 1: Introduction Chapter 2: Black Entrepreneurship from 1900 until 1935 Chapter 3: Immigrant Entrepreneurs' Relations with Customers in the Early 20th Century Chapter 4: The Fate of Minority Merchants during Depression and War Chapter 5: Government Policy, Ghettos, and Merchant-Customer Conflict after World War II Chapter 6: Demographic Change and Urban Transformation: Interactions between Immigrant Business Owners and Customers, 1970 to 2005 Chapter 7: The Informal Economy as a site of Competition between Disadvantaged Populations and Ethnic Merchants Chapter 8: Ethnic Merchants in a Black Majority City: The Case of Detroit (with Joe Darden) Chapter 9:Social Inequality and Merchant-Customer Conflicts Notes Bibliography Index About the Author

Royal delicacies at peasant prices: cross-national differences, common grounds – towards an empirically supported theory of the informal economic activities of migrants

Turkish groceries and fast food restaurants, Chinese barbecues, Pakistani kiosks, Iranian pizzerias and carpet stores, Arabic kebab houses, erotic artists from Eastern Europe and Southeast Asia, exchange agencies across Denmark and many other EU countries, a growing number of wholesale businesses in the Copenhagen area and other EU capitals are all manifestations of contemporary immigrant entrepreneurship. The list could be easily extended as immigrants in many cities in the European Union, and in advanced economies in general, have set up their own businesses of various kinds. But what is the role and the impact of immigrant owned businesses, and what influence do they have on the welfare state, on living conditions of immigrants and natives and on the economy in general? Drawing on empirical evidence from cross-national studies we attempt to provide answers to these core issues, whilst developing conceptual foundations of a theoretical framework that can explain the phenomenon, enabling us to make more reliable predictions future development.

Bamboo Networks: Chinese Business Owners and Co-Ethnic Networks in Auckland, New Zealand

Abstract As part of a larger research project examining the settlement of immigrant business owners in Auckland, New Zealand, this research examines the nature of the connections that these Chinese business owners have with their employees, suppliers and customers. The results suggest a significant reliance on networks that involve co-ethnics, especially for the China-born but even for those Chinese business owners who were New Zealand-born. Overall, the research indicates the key role that relational embeddedness plays in the establishment and development of migrant businesses.

Immigrants in the city: from exploration to domestication

This essay looks at immigrants’ integration into the economic and cultural life of Haifa, one of the largest Russian-speaking urban enclaves. Based on participant observation and auto-ethnography, it reflects on visual and acoustic signs of the ‘Russian’ presence. It further analyzes factors determining the newcomers’ choices of neighbourhood and subsequent intra-city migration. Immigrant-owned businesses catering to consumer tastes of ex-Soviets have become the meeting points of various ethnic groups inhabiting the city. Over time, educational institutions created by immigrant teachers and centres providing intellectual enrichment have switched to bilingual activities to meet the changing needs of co-ethnics and to attract a wider public, but the underlying pedagogical principles and cultural values behind them remain Russian.

Immigrant business enterprises: A classification framework conceptualization and test

AbstractThis article proposes the Immigrant Business Enterprises Classification Framework to organize immigrant‐owned businesses into categories associated with different levels of business integration into a host country's mainstream business community. The article applies the framework and reports the findings of structured face‐to‐face interviews with 199 Hispanic business enterprises (HBEs) in Indianapolis. The authors find Hispanic‐owned businesses hold different characteristics depending upon the integration category in which they are classified; the findings suggest that to support immigrant entrepreneurship, governments, business development organizations, and researchers should address category‐specific challenges, opportunities, and needs. © 2010 Wiley Periodicals, Inc.

The Boston Safe Shops Model: An Integrated Approach to Community Environmental and Occupational Health

Small, immigrant-owned businesses, such as auto repair shops and nail salons, often face barriers to environmental and occupational health compliance and may be a source of neighborhood pollution complaints. The Boston Public Health Commission established the Safe Shops Project to improve safety and environmental practices in such businesses using a community partnership model that incorporates enforcement inspection findings, worker training, technical assistance, and referral to health care and business resources. This integrated technical assistance approach has led to improved occupational health and environmental conditions, adoption of pollution prevention technologies, novel problem-solving, and dozens of health screenings and insurance referrals for workers and their neighbors.

The Role of Ethnicity in the Geography of Consumption

Two notable trends in immigrant gateway cities—the growth of immigrant-owned businesses and accelerated ethnic marketing efforts of mainstream firms—raise an interesting research question of how ethnicity interacts with accessibility in the geography of consumption. Given that many immigrants today are better educated and more affluent than their predecessors, and an ethnic business and its mass counterpart can differ little in size and product variety terms, it is intriguing to discover how urban consumers choose between businesses owned and operated by ethnic minorities and those in the mass market. Based on two surveys, this article compares the grocery shopping behavior of Chinese immigrants and the rest of the population in two study areas in one of the most culturally diverse urban regions of the world—Toronto, Canada. Although a large Chinese population and mainstream supermarkets are found in both locations, one of the study areas is characterized by a high concentration of Chinese supermarkets, and the other contains only one. Analyses show that Chinese and non-Chinese populations in Toronto exhibit distinct grocery shopping behaviors. Chinese supermarkets and mainstream supermarkets are complementary consumption sites for Chinese residents but independent ones for non-Chinese. The role of ethnicity/culture is strong. Recognizing the sociocultural embeddedness of immigrant shoppers and the cultural representation of ethnic retail spaces, this study raises the question of how effective ethnic marketing can be in the case of grocery retailing from the perspective of both mainstream and Chinese businesses, with implications for immigrant community development, urban retail planning, and national multicultural and integration policies.

Breaking out: The Dynamics of Immigrant Owned Businesses

As far as integration policy in a Danish context is concerned a phenomenon have been observed during the last decade: Immigrant businesses are spreading rapidly in the country, dominating certain business lines in deprived inner city areas. According to registry and survey data, most immigrant businesses - and particularly those owned by immigrants from less developed countries in Asia, the Middle East and Africa - are tiny self-employment units in which profits are low and working hours long for the owners. They occupy mainly traditional small firm dominated business lines, which the majority population tend to abandon anyway. Only seldom do they grow into larger firms and shift to more advanced and profitable business fields. This pattern, however, seems to be slowly changing in that some well-educated first and second generation immigrant groups (among them particularly women) have the potential to start and run more advanced and profitable businesses outside the traditional ethnic business lines and outside minority dominated inner city areas. Key determinants in this process seem to be owner qualifications, network patterns, financial resources and cross border business relations.

Obstacles and Opportunities: Latino-Owned Small Businesses in Iowa

Iowa is a new destination state for Latino migration in the United States (Zuniga and Hernandez-Leon, 2005). The state's Hispanic population grew by 153% between 1990 and 2000 to 83,000 and in 2005 the US Census Bureau estimated the size of Iowa's Hispanic population had grown to more than 100,000.1 Indeed, between the Censuses counts of 1990 and 2000, immigration accounted for two-thirds of the state's total population growth. About 75% of these newcomers came from Mexico.The influx of Latino newcomers started in earnest about 1993 and was driven by massive movements of Latino labor into food processing plants in several Iowa communities. Meatpacking communities in particular experienced the rapid ethnic diversification (Grey 2000) associated with Latino influxes. Five meatpacking towns-Marshalltown, Dennison, Perry, Postville, and Storm Lake-experienced Latino growth rates over 1,000% between 1990 and 2000 (Grey 2005). Other communities experienced Latino influxes as these newcomers took jobs in other agribusinesses including poultry, egg production, hog confinement operations, and dairy farms. While most of the 1990s influx of Latinos to Iowa was drawn by jobs in meatpacking plants and other agribusinesses, there has been a slow but steady movement of Latinos into other sectors of the Iowa economy. These include road and building construction, landscaping, cleaning services, nursing homes, and retail.Determining the economic contribution of Latinos to Iowa has generally been limited to their wages (well into the millions of dollars in meatpacking towns) and their buying power as expressed in the purchase of consumer goods, services, houses, and cars. Other economic contributions are generally overlooked. In particular, there has been little or no recognition of the role Latino-owned businesses now play in local economies. For the most part, established-resident Anglo small business developers, economic developers, and chambers of commerce have underestimated the size and economic contribution of immigrantowned businesses. There are three reasons for this. First, most economic developers focus on large- to moderate-scale businesses. These high profile, high-impact businesses include manufacturing plants and large retail outlets. They bring large investments of capital, enhance local infrastructure, and often employ large numbers of people. These high profile investments bring prestige to communities (and the economic developers who recruit them). In addition, development incentives such as tax breaks and special utility rates are generally geared toward recruitment of large-scale enterprises. Given the potential political and economic payoff associated with recruiting large employers, small businesses often fall off the radar screen of economic developers.Secondly, small business developers are more likely than economic developers to work with small-scale operations. But in the case of immigrant-owned businesses, cultural and language issues often get in the way. Even when language barriers can be overcome to some extent with interpreters, cultural issues often compound the process. Onesize-fits-all scripts for planning, financing, and opening small businesses that typically work for established-resident Anglos do not always work for newcomer owners because they usually come from very different operating conditions in their home countries. Chambers of commerce in Iowa meatpacking towns often try to invite Latino-owned businesses, but without much success. The reason has to do with a clash of expectations for what a chamber can do for business owners and immigrant owners often see no point in joining associations with their competitors.Finally, economic developers, chambers, and small business developers generally do not recognize or understand the role of microenterprise in the so-called silent or gray economy that is not taxed or regulated, yet these small businesses provides much needed goods and services to newcomers and established residents alike. …

The use of social and human capital among Canadian business immigrants

Social capital in the form of ethnic networks and family ties is assumed to function critically in the establishment and operation of immigrant-owned businesses. In this paper I argue that, although the formation and expenditure of social capital may typify the experiences of many immigrant entrepreneurs, some enter the host society with sufficient human capital to enable them to forego the utilisation of social capital in the adaptation process. To test this hypothesis, interviews were conducted with 70 immigrant entrepreneurs in the province of Ontario between 1993 and 1995. All interviewees entered Canada under the auspices of the Canadian Business Immigration Program, a federal programme designed to attract immigrants with demonstrable business and managerial skills, a critical form of human capital. All, therefore, had pre-migration intentions of entrepreneurship in the receiving society. What is found among these business immigrants is a minimal reliance on social capital in establishing and operating their firms. It is concluded that immigrants entering the host society with pre-migration intentions of business ownership possess sufficient human capital to enable them to disregard the formation and utilisation of social capital in their economic adaptation.

Social Capital and Income Attainment among Chinese Immigrant Entrepreneurs in Toronto

New economic sociologists have focused on the positive effect of social capital embedded in the ethnic structure on the individual's economic actions. However, recent studies on middle-class immigrants provide inconsistent support for this view. This study examines the significance of social capital by investigating the relationship between the income attainment of immigrant entrepreneurs on the one hand, and two forms of institutional arrangements, co-ethnic firm linkages and co-ethnic personal recruitment, on the other. We found that social capital embedded in the ethnic structure does not play a significant role in the income attainment of Chinese immigrant business owners in Toronto. Rather class resources and social capital beyond the ethnic structure significantly increase the level of income attainment.

Social and human capital in immigrant adaptation:: The case of Canadian business immigrants

Purpose: With the resurgence of immigration to North America in the past three decades, research on immigrant adaptation and the attendant issues of assimilation has burgeoned. A prevailing assumption of much of this research is that social capital is a vital resource enabling immigrants to find their economic and social niches in the host society. In a word, social capital is a key factor in the immigrant adaptation process. This assumption has been especially prominent in research focusing on one specific subset of immigrants: entrepreneurs. Social capital in the form of ethnic networks and family ties is assumed to function critically in the establishment and operation of immigrant-owned businesses. This paper argues that although the formation and expenditure of social capital may typify the experiences of many or even most immigrant entrepreneurs, some enter the host society with sufficient human and/or financial capital that enables them to forego the utilization of social capital in the adaptation process. Methods: To demonstrate, I draw upon in-depth interviews conducted with 70 immigrant entrepreneurs in the province of Ontario, Canada between 1993 and 1995. All interviewees entered Canada under the auspices of the Canadian Business Immigration Program, a federal program designed to attract immigrants with demonstrable business and managerial skills that presumably will lead to the establishment of a firm and thus to the subsequent creation of jobs and economic activity. A formal requirement of their entrance, then, is the possession of proven business skills, a critical form of human capital that facilitates successful economic adaptation in the host society. Forms of social capital are described and their applicability to the adaptation experiences of the interviewees is analyzed. What is found among these business immigrants is a minimal reliance on social capital in establishing and operating their firms. In securing investment capital, finding a work force, and acquiring information, ethnic and family ties, the most common forms of social capital for immigrants generally and for immigrant entrepreneurs in particular, do not play a major role. Solidarity with co-ethnics and the use of family labor, so common among conventional immigrant entrepreneurs, are not of significant import in the economic adaptation of these business immigrants. Moreover, ties to coethnics are only minimally significant in patterns of social adaptation as well. Results: It is concluded that immigrants entering the host society with pre-migration intentions of business ownership possess sufficient human capital that enables them to disregard the formation and utilization of social capital in their economic and social adaptation. In this they differ from immigrants who take a more conventional path to business ownership, that is, laboring in the mainstream work force following entrance into the host society and gradually accumulating resources that lead to entrepreneurship. For business immigrants with children, however, social capital does play a key role in the decision to immigrate. Business immigrants are prepared to abandon successful firms in the origin society in order to provide their children with a more promising socioeconomic environment, including above all what is viewed as superior opportunities for education. Hence, the social capital that inheres in close-knit family arrangements provides incentive for parents to accept losses in financial capital in order to increase their children’s human capital. Conclusion: The context of the receiving society may also be seen as a form of social capital for Canadian business immigrants. All declare that quality of life, rather than the lure of financial success, serves as their major incentive to immigrate to Canada. Moreover, the fact that they enter a society that officially proclaims its multicultural character offers them the opportunity to become Canadian but to retain their ethnicity. The source of social capital in this case, then, is not the ethnic community, but the broader society.

Retail Niche Domination Among African American, Jewish, and Korean Entrepreneurs

Do immigrant entrepreneurs who open businesses in predominantly Black neighborhoods take business opportunities away from African Americans in the community? Given the prevalence of immigrant-owned businesses, one may assume that immigrant groups such as Koreans, Jews, Chinese, and Asian Indians compete with African American entrepreneurs, thereby inhibiting African American small-business development. However, immigrant groups enter and dominate retail niches different from those of African Americans, and because ethnic groups cluster in different industries, competition is more likely to be intra-ethnic. However, competition is more nuanced and manifests in subtle ways. Entrepreneurship is embedded in ethnic networks that act as coethnic advantages for some and blocked opportunities for others. The article examines why African Americans, Jews, and Koreans enter different retail niches and explores the coethnic advantages and disadvantages of niche domination. The article also illustrates how niches remain closed to outsiders, resulting in business disadvantage or exclusion from certain niches.

Existing Self-Employment: An Analysis of Asian Immigrant-Owned Small Businesses

Part of the uniqueness of the immigrant Asian business community in the U.S. lies in the fact that many among the highly educated pursue self-employment in small-scale, low-yielding retail and personal service fields. This study analyzes owner departure for a nationwide sample of small businesses owned by Asian Indian and Filipino immigrants and a comparison group of Asian nonimmigrant firm owners. Controlling for firm and owner traits, highly educated Asian immigrant owners are more likely than others to exit self-employment over the 1987--1991 period; exit from traditional fields (retail and personal services) is pronounced. These exit patterns do not typify the comparison group. Findings are consistent with the hypothesis that self-employment is often a form of underemployment among Asian immigrants.

Social Resources Generated by Group Support Networks May Not Be Beneficial to Asian Immigrant-Owned Small Businesses

The immigrant entrepreneur is often seen as a member of supportive peer and community subgroups. These networks assist in the creation and successful operation of firms by providing social resources in the form of customers, loyal employees, and financing. This study provides evidence that the success and survival patterns of Asian immigrant firms derive from their large investments of financial capital and the impressive educational credentials of the business owners. Heavy use of social support networks typifies the less profitable, more failure-prone small businesses of Asian