Paths of evolution for the Chinese migrant entrepreneurship: a multiple case analysis in Italy

Chinese diaspora is one of the most important areas in the field of immigrant entrepreneurship and the Chinese case is, for absolute numbers, entrepreneurship rates and scientific attention, one of the most significant phenomena in the world and in Italy. While much of the literature on the topic focuses on ethnic networks and social ties, there is a lack of studies that acknowledge the role of business networks in the later growth of migrant entrepreneurship, when the importance of social ties within the ethnic community diminishes. This paper tries to answer the following research question: Which is the role of ethnic networks and business networks in the path of evolution of Chinese migrant entrepreneurship? Thus, the paper analyses the structure and characteristics of ethnic networks and business networks and the role of each in the growth and evolution of Chinese migrant entrepreneurship. Our research considers business networks as the main focus of analysis that may replace social ties in consolidating insidership in new business settings and in finding new opportunities. A qualitative methodology is adopted, namely a multiple case study. Five cases of individual Chinese companies settled in a specific area are presented, for which the networks in which they are involved are traced and analysed. The case analysis shows that in the evolution of Chinese migrant entrepreneurship, ethnic networks are very important in the early phases of the business, but the role of cross-cultural business networks becomes relevant for further development. Implications—managerial and for policy makers—are highlighted and discussed.     

Patterns of ethnic self-employment in time and space: evidence from British Census microdata

The over-representation of certain ethnic minority and immigrant groups in self-employment is, in common with other developed countries, a notable feature of the UK labour market. Compared to the substantial growth in self-employment in the 1980s, the 1990s saw overall self-employment rates plateau. Despite this, some minority groups experienced continued growth whilst others, particularly Chinese and Indian males and Pakistani, Bangladeshi and Chinese females, saw their self-employment rates decline. In this paper we use microdata samples from the 1991 and 2001 Censuses to investigate the dynamic and spatial patterns of ethnic entrepreneurship. Using decomposition methods we find that, for males from the Asian groups, changes in observable characteristics associated with an increasing proportion of second-generation individuals explain much of the decline in self-employment. This, which is also true of Chinese females, reflects in part the age structure and educational experiences of the second generation. The dynamics of Black male and Pakistani/Bangladeshi male and female entrepreneurship are less easy to explain. We also find that, while there is no evidence of self-employment being an “enclave” phenomenon, local economic conditions do affect rates of entrepreneurship for some groups, notably Pakistanis and Bangladeshis.     

Co-ethnic markets: Financial penalty or opportunity?

This paper applies the view of resource based theory to minority entrepreneurship. It examines minority entrepreneurs’ reliance on co-ethnic markets in terms of the impact this has on the financial performance of their firms. This research focuses on three minority groups in particular: African Americans, Korean Americans and Mexican Americans. Findings indicate that owner's age and marital status, but not business age, shape the extent to which a business owner relies on co-ethnic clients. Furthermore, Korean American owned firms are less likely to have high proportions of co-ethnic clients compared to Mexican- and African American owned firms. Having a large co-ethnic clientele results in a financial penalty in terms of the revenue an owner draws from his or her business. This penalty occurs in businesses owned by all three groups of entrepreneurs. Findings lend support to the resource based theory view of the firm in terms of the need to dynamically apply resources in order to achieve a competitive advantage. Implications for theory and practice are discussed.     

Measuring entrepreneurship over time

This article is a review of three measurement issues that impact the study of entrepreneurship over time: (1) level of analysis difference between firms and individuals, (2) differences between rate and stock measures, and (3) the effects of choosing particular time frames on subsequent analytical results. Based on theory that views entrepreneurship as depending on ownership rights (Hawley 1907), this article develops a longitudinal measure of entrepreneurship in the United States—the number of organizations per capita. The problems and advantages of using a measure based on organizations per capita as an indicator of entrepreneurship is examined.Understanding how and what is being measured in studies of changes in entrepreneurship over time is an important issue for academic researchers and public policy makers. Measurement of changes in entrepreneurship over time can shed light on important research questions and public policy issues about entrepreneurship. For example, is entrepreneurship increasing in the United States? If entrepreneurship is increasing, is this trend comparable to any previous time periods, or is the current increase in entrepreneurship a new or unique social phenomenon? What influences changes in entrepreneurship over time?The choice of certain measures of entrepreneurship is likely to influence the answers to these questions. For example, the measures used in an entrepreneurship study are an implicit specification of one's views of entrepreneurship (e.g., entrepreneurship as self-employment or firm creation), and few measures of entrepreneurship reflect critical changes in important environmental influences (e.g., technological change) because of short measurement time frames. Therefore, determining the contribution of entrepreneurship to the well-being of an economy is dependent on understanding what measures of entrepreneurship are utilized for making these evaluations and the time frame used for these measures.We review three measurement issues that impact the study of entrepreneurship over time: (1) level of analysis differences between firms and individuals, (2) differences between rate and stock measures, and (3) the effects of choosing particular time frames on subsequent analytical results. Based on theory that views entrepreneurship as depending on ownership rights (Hawley 1907) this article develops a longitudinal measure of entrepreneurship in the United States—the number of organizations per capita.Studies of entrepreneurship focus on either individual level activity (e.g., self-employment) or on firm level activity (e.g., new incorporations). Self-employment research focuses on individuals who employ themselves; that is, individuals who report wages, but not wages paid to them by other individuals or organizations. In most studies of the self-employed, firm founders would, therefore, be classified as wage earners and not as entrepreneurs. New firm research focuses on the rate of new firm entrants, typically measured as new incorporations, so such businesses as proprietorships or partnerships will not be counted.A rate is a change from one state to another (e.g., the number of people who become self-employed for a specific year, or the number of new firms created for a specific year), whereas a stock specifies a particular level (e.g., much like a stock of inventory), such as the number of self-employed, or a particular number of firms, for a specific time period. It is important to recognize that entry into business does not necessarily guarantee remaining in business. For example, although the number of people who become self-employed may increase for a specific year, the number of people who remain self-employed may actually decrease if more of the self-employed fail to remain in business than those that enter. The stock of the self-employed can decrease if the outflow of self-employed is greater than the inflow. For those persons interested in whether entrepreneurial activity results in wealth creation (either individually or societally), the realization that entry into business may not lead to a sustainable business (and therefore no creation of wealth) should be a signal that measuring rates of business formation and rates of self-employment may not be appropriate for this type of research.The factors that drive changes in the rate of entrepreneurship are not likely to be manifest over short timeperiods. Changes in values, attitudes, technology, government regulations, and world economic and social changes have a significant influence on changes in entrepreneurship over time. Studies that have measured entrepreneurship over recent time periods are, therefore, likely to miss the influence of these variables.We introduce a measure of entrepreneurship (organizations per capita) based on a theory of entrepreneurship as ownership. This measure shows the stock of organizations in the U.S. economy over time (from 1857 to 1992). The problems and advantages of using a measure based on organizations per capita as an indicator of entrepreneurship is examined. We conclude with some suggestions for improving entrepreneurship research by recognizing the limitations of particular longitudinal entrepreneurship measures and by challenging the field to seek convergent validity among measures.     

Measuring Ethnic Community Involvement: Development and Initial Testing of an Index*

This paper builds on the work of Chaganti and Greene, who distinguish between ethnic minority entrepreneurs/small business owners who are very involved with their ethnic community and those who are not. We extend their work by developing an Index of Ethnic Community Involvement based not only on personal but also business characteristics. We utilize a large sample size (698 interviews with entrepreneurs), drawn from five ethnic groups, and develop a valid and reliable (0.69) Index of Ethnic Involvement (IEI) with a strong emphasis on social capital theory. Our initial analysis shows the IEI predicts some personal and business characteristics. Future development will include building regression models to predict business outcomes. The IEI, when fully developed, promises to be useful for targeting assistance, education and training programs, and policy initiatives for entrepreneurs and small business owners according to the level of ethnic community involvement.     

Potential Lending Discrimination? Insights from Small Business Financing and New Venture Survival

Previous literature provides potential lending discrimination evidence of disadvantaged women and minority entrepreneurs' high rate of business loan application denial and their unequal access to external and commercial credits in comparison with white business owners. This paper aims to expand the literature and discussions on small business loan discrimination from a new research direction, besides those on loan applications/denials and on loan terms, focusing on the consequences of small business loans in terms of new venture survivability. The proposed new research direction is consistent with similar research approaches in mortgage lending literature examining loan default rates and potential discrimination. The Kauffman Firm Survey data are used with appropriate hazards model for the analysis. Extensive creditworthiness and business survival determinants are applied for controlling for their influences across racial and ethnic groups. The main empirical finding is that after controlling for a wide variety of borrower, establishment, and regional characteristics, business closure rates for minority entrepreneurs are not higher than those for white business owners. This finding does not support the prediction of the model for lender bias against minority entrepreneurs.     

Predictors and financial outcomes of corporate entrepreneurship: An exploratory study

Today, there is considerable scholarly and managerial interest in corporate entrepreneurship; that is, those activities that enhance a company's ability to innovate, take risk, and seize opportunities in its markets. Corporate entrepreneurship centers on creating new business by penetrating new markets, pursuing new business, or both.Despite the growing recognition and use of corporate entrepreneurship, little empirical research has been done on its antecedents and potential association with company financial performance. To fill this gap in the literature, this study proposes a model that identifies potential environmental, strategic, and organizational factors that may spur or stifle corporate entrepreneurship. The model also highlights the potential associations between corporate entrepreneurship and corporate financial performance.Building on the existing literature, the study advances five hypotheses that operationalize the model. The hypotheses are tested using data from 119 of the Fortune 500 industrial firms, covering the period 1986 to 1989. This exploratory study's results indicate that: (1) environmental dynamism, hostility, and heterogeneity (multiplicity and complexity of environmental components) intensify corporate entrepreneurship; (2) growth-oriented strategies are associated with increased corporate entrepreneurship, whereas a strategy of stability is not conducive to corporate entrepreneurship; (3) the scanning, formal communication, and integration components of formal organizational structure are positively related to corporate entrepreneurship—increased differentiation and extensive controls stifle corporate entrepreneurship; (4) clearly defined organizational values, whether relating to competitors or employees, are positively associated with corporate entrepreneurship; and (5) corporate entrepreneurship activities are associated with company financial performance and reduced systematic risk.     

Collaboration and opportunism as a duality within social capital: a regional ethnic Chinese case study

Abstract

Ethnic networks constitute a form of social capital and are central to the success of many ethnic Chinese entrepreneurs in Southeast Asia. The paper elucidates how such ethnic networks come to be formed and how they may create value through entrepreneurship. The findings suggest that ethnic networks can be an enabler of business cooperation but have problems stemming from an essentially dual nature that balances the benefits of such cooperation against tensions from self-interest, opportunism and covert dealings. These rarely described opportunistic characteristics are derived from the distinct historical background of ethnic Chinese business in Southeast Asia. The paper advances the existing concept of ethnic Chinese business networking by showing empirically, the workings of a case of the normally intricate phenomena. Three propositions for theory are also developed that highlight implications of the opportunism, and the rules of the game in which human capital is being used.     

Missed opportunities? Reaching the ethnic consumer market

Changing population demographics within the UK have become a source of increased interest to marketers as companies have realized the importance of targeting their products and advertising efforts towards minority and ethnic groups. In addition, as the UK’s ethnic minorities grow in both numbers and in terms of prosperity, so does the commercial significance of this market. A clearer understanding of both the nature of changing markets and the relative importance of different minority ethnic groups as consumers is imperative to facilitate both consumer understanding and business development; marketers need to understand better how to target these people, what they have in common with the mainstream and where the differences lie. This paper seeks to describe current understanding of ethnic consumers and their impact on the marketplace while highlighting an area where future research is potentially of considerable benefit.     

Sampling Minority Business Owners and Their Families: The Understudied Entrepreneurial Experience*

We here review and critique prior research on minority entrepreneurship, paying particular attention to the contributions and limitations of deployed sampling techniques and research methodologies. As based on this review, we then introduce the 2003 and 2005 National Minority Business Owner Surveys—a comprehensive and primary data collection effort that used varied methodologies to secure in‐depth information about random national samples of African American, Korean American, and Mexican American populations as well as a comparison sample of nonminority business owners. We present the initial business ownership profiles developed with these recent data, in part, as a benchmark of the U.S. entrepreneurial experience, and compare the profiles with those presented in prior research. These profiles document similarities and differences across the four groups and provide an empirical foundation for understanding the origin of those similarities and differences. No longer can we ignore the in‐depth study of minority businesses and their owning families nor can we simply assume that all businesses are the same, regardless of minority status or ethnicity.     

Immigration, In-Migration, Ethnicity and Entrepreneurship in the United Kingdom

This paper develops and tests hypotheses concerning the effect of migrant status and ethnicity on propensity to engage in entrepreneurship (defined as new business activity) at the individual level in the UK. The hypotheses are tested using bivariate analysis (Pearson tests of independence) and multivariate analysis (binary logistic regression). Bivariate analysis suggests that new business activity varies with migrant status and ethnicity. Multivariate analysis suggests that migration increases the odds of engaging in new business activity, that the independent effect of ethnicity is marginal, and that being a recent ethnic minority migrant decreases the odds, after controlling for other individual level factors. At the regional level, a preliminary analysis suggests that gross migration flow has a higher correlation with new business activity than other commonly used regional demographic or economic development measures.      

Ethnic Enclaves to Diaspora Entrepreneurs: A Critical Appraisal of Black British Africans' Transnational Entrepreneurship in London

In this article, the author examines the transition from ethnic enclave to diaspora/transnational entrepreneurship by Black African ethnic entrepreneurs in the United Kingdom through interview/case study approaches. Key issues at stake are whether diaspora/transnational entrepreneurship is a kind of adaptive process in self-actualization, economic empowerment, or competitive advantage or a strategy of reintegration with the country of origin. Leveraging duality of opportunities results in subjective successful business performance and personal contentment of the diaspora entrepreneurs. Transnational entrepreneurship is crucial to business growth in Africa. This is particularly true with diaspora transfers to Africa playing a significant role in social, economic, and business developments.     

Should I stay or should I go? Career choice intentions of students with family business background

Personal and motivational patterns of intentional founders have been researched in great depth; however, antecedents to career choices of intentional successors have been conspicuously missing in entrepreneurship research. By drawing on theory of planned behavior, we investigate how intentional founders, successors, and employees differ in terms of locus of control and entrepreneurial self-efficacy as well as independence and innovation motives. We find that transitive likelihood of career intent depends on degree of entrepreneurial self-efficacy and the independence motive. Unexpectedly, we see that high levels of internal locus of control lead to a preference of employment, which challenges traditional entrepreneurship research and suggests that the feasibility of an entrepreneurial career path does not automatically make it desirable. Our findings suggest that students with family business background are pessimistic about being in control in an entrepreneurial career, but optimistic about their efficacy to pursue an entrepreneurial career.     

The evolving domain of entrepreneurship research

Research on entrepreneurship has flourished in recent years and is evolving rapidly. This article explores the history of entrepreneurship research, how the research domain has evolved, and its current status as an academic field. The need to concretize these issues stems partly from a general interest in defining the current research domain and partly from the more specific tasks confronting the prize committee of the Global Award for Entrepreneurship Research. Entrepreneurship has developed in many sub-fields within several disciplines—primarily economics, management/business administration, sociology, psychology, economic and cultural anthropology, business history, strategy, marketing, finance, and geography—representing a variety of research traditions, perspectives, and methods. We present an analytical framework that organizes our thinking about the domain of entrepreneurship research by specifying elements, levels of analysis, and the process/context. An overview is provided of where the field stands today and how it is positioned relative to the existing disciplines and new research fields upon which it draws. Areas needed for future progress are highlighted, particularly the need for a rigorous dynamic theory of entrepreneurship that relates entrepreneurial activity to economic growth and human welfare. Moreover, applied work based on more careful design as well as on theoretical models yielding more credible and robust estimates seems also highly warranted.     

Theory building in the entrepreneurship paradigm

Ever since Newton's Principia set mathematical models at the pinnacle of a scientific paradigm, scientists in all disciplines—not just the physical sciences—have striven to express their theories mathematically. In the social sciences, mathematical models are more often than not a little more than a Laplacian fantasy. Nevertheless, mathematics is being used more and more extensively by social scientists—none more so than economists and business researchers. This paper focuses on one area of social science, entrepreneurship, and examines the difficulties of trying to use mathematics to model entrepreneurship processes.The entrepreneurial process is a dynamic, discontinuous change of state. It involves numerous antecedent variables. It is extremely sensitive to initial conditions. To build an algorithm for a physical system with those characteristics would be daunting to the most gifted applied mathematician. But when you add the requirement that the entrepreneurial process is initiated by the volition of a unique human being, mathematical modeling may be impossible, because there is “an essential non-algorithmic aspect to conscious human action.” This article argues that today's most prominent mathematical representation of entrepreneurship, population ecology, falls far short of Penrose's specification for a “useful theory.”Some observers believe that the answer to entrepreneurship theory may be found in the chaos theory—a relatively new science that was popularized by Gleick in his book Chaos: Making a New Science. This article explores the chaotic zones of several algorithms that provide alluringly simple representations for the entrepreneurial process. One of them is the fundamental equation for population ecology theory. It shows how under some conditions that equation exhibits some wild, chaotic behavior that gives an observer the feel of entrepreneurship. But it is no more than a mathematical metaphor because the accuracy of the measurements that are needed to observe true scientific chaos in the entrepreneurial process are unattainable in practice.     

A theory of serial entrepreneurship

The contribution of serial entrepreneurs to entrepreneurial activity is significant: in Europe, 18–30% of entrepreneurs are serial; in the US, their contribution is about one-eighth. Yet, theories of entrepreneurship and industry dynamics presume that all firms are launched by novice entrepreneurs and firm failure is synonymous with exit from entrepreneurship. We propose a theory of serial entrepreneurship in which an entrepreneur has three occupational choices: maintain his business in operation, shut it down to enter the labor market to earn an exogenous wage, or shut it down to launch a new venture while incurring a serial startup cost. In equilibrium, a high-skill entrepreneur shuts down a business of low quality to become a serial entrepreneur, launching and subsequently closing firms until a high quality business is found; a low-skill entrepreneur shuts down a business of low quality to enter the labor market, never to become a serial entrepreneur. A decrease in the wage or serial startup cost, or an increase in the startup capital, enhances the contribution of serial entrepreneurs to entrepreneurial activity and promotes new firm formation (by increasing entrepreneurship and the number of new firms that survive), but its effect on the exit rate of new firms is ambiguous. We show the model is consistent with evidence relating to the impact of an entrepreneur’s characteristics and prior experience in entrepreneurship on the survival of his firm and his entry into and survival in entrepreneurship.     

International entrepreneurship: A critical analysis of studies in the past two decades and future directions for research

International entrepreneurship (IE) is an emerging field with a rapidly growing body of knowledge. This paper examines gaps, issues and trends of the IE in the last two decades. First, it suggests an integrative framework based on international business, entrepreneurship, strategic management, social network and marketing theories. The suggested model highlights the significant role played by the entrepreneur/team, firm and network resources that act as antecedents to international opportunity development and value innovation. Second, it suggests four typologies of firms (born global, enduring global, early exporter and mature exporter) that can be studied under the IE theme. Finally, we discuss future research directions.     

Entrepreneurship and university-based technology transfer

The success of business incubators and technology parks in university settings is often determined by how well technology is transferred from the labs to their startup firms. University technology transfer offices (UTTOs) function as “technology intermediaries” in fulfilling this role. Yet, entrepreneurship theory and research on the role of the UTTO in business incubation and new venture formation is sparse. To move the research along, we use grounded theory to build a framework to address two questions: (a) Which UTTOs' structures and licensing strategies are most conducive to new venture formation; and (b) how are the various UTTOs' structures and licensing strategies correlated with each other. Our findings reveal a complex set of relationships between UTTO structure and strategies, new venture formation, and business incubation.Based on interviews with 128 UTTO directors, we show that whereas for-profit UTTO structures are positively related to new venture formation, traditional university and nonprofit UTTO structures are more likely to correlate with the presence of university-based business incubators. Licensing-for-equity strategy is positively related to new venture formation while sponsored research licensing strategy is negatively related. Interestingly, the licensing-for-cash strategy, the most prevalent transfer strategy, is least correlated to new venture formation. A content analysis of UTTO mission statements also revealed an overemphasis on royalty income and an underemphasis on entrepreneurship. The paper concludes with a discussion that outlines some of the implications and limitations of our model.     

How Do Risk Attitudes Differ within the Group of Entrepreneurs? The Role of Motivation and Procedural Utility

Starting a business involves risk and, thus, requires a risk‐taking attitude. The concept of risk and entrepreneurship has been widely discussed in the entrepreneurship literature; most studies compare entrepreneurs with nonentrepreneurs such as managers or bankers. So far, little research exists on the risk attitudes of the different types of entrepreneurs—those who pursue a new business because of opportunity and those who do so through necessity. This study aims to fill this gap. Our particular focus is on individuals' motivations to start their businesses and the nonmonetary returns from entrepreneurship. The results show that opportunity entrepreneurs are more willing to take risks than necessity entrepreneurs. In addition, those who are motivated by creativity are more risk tolerant than other entrepreneurs. The study contributes to the literature about both risk attitudes of entrepreneurs and necessity and opportunity entrepreneurship.     

The multiple institutional constraints facing new Chinese immigrant entrepreneurs in Australia

Drawing on insights from the institutional entrepreneurship literature about changes that occur under institutional constraints, in‐depth interviews with 36 new Chinese immigrant entrepreneurs (NCIEs) were conducted in Australia. The findings suggest that NCIEs are not only constrained but also enabled to make changes by the regulatory, normative, and cultural‐cognitive forces across Australia and China, thus leading to different practices and a particular distributional pattern in business activities. This feature distinguishes NCIEs from other segments of ethnic Chinese entrepreneurs. This study provides an explanation for the changing landscape of business activities among NCIEs and also identifies an alternative avenue for changes under institutional constraints. Immigrant entrepreneurs are suggested to not only draw competitive advantages from their cultural origins and ethnic resources but also engage in both the mainstream and international markets. An inclusive and supportive regulatory framework is suggested as a way to facilitate the business growth of immigrant entrepreneurs and revitalize local economies.