Migrant entrepreneurs and social
capital: a revised perspective
Andreia Tolciu
Hamburgisches WeltWirtschaftsInstitut (HWWI), Hamburg, Germany
Abstract
Purpose – The 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/approach – The study relies on 58 semi-structured interviews with Turkish
entrepreneurs, both first and second generation, conducted in Hamburg between October 2008 and
January 2009.
Findings – The 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/value – Until 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.
Keywords Entrepreneurs, Ethnic minorities, Migrant workers, Ethnic groups
Paper type Research paper
Introduction
The study of migrant entrepreneurship has generated over the past thirty years a
multidisciplinary research agenda. Most of the existing theories have converged on
integrating migrant entrepreneurs in a context shaped by factors such as structural
conditions on the labour market, legal arrangements and specific group or individual
characteristics (Zhou, 2004).
Considerable attention has been paid to disseminating the relationship between
migrant entrepreneurship and ethnic social capital (see Appendix Tables AI, AII and
AIII). A central idea emerging from this literature is that migrant businesses are
created and managed within networks of ethnic interpersonal relations. The ethnic
social capital of migrant entrepreneurs has often been praised as a key element in the
firm creation and daily business process through the provision of customers, loyal and
cheap labour force, and financing (Aldrich and Waldinger, 1990). Moreover, it is
suggested that ethnic resources and cultural factors also take up a central position in
explaining growth and business success in ethnic enterprises (Light and Bonacich,
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Migrant
entrepreneurs
409
Received October 2009
Revised March 2010
May 2010
Accepted July 2010
International Journal of
Entrepreneurial Behaviour &
Research
Vol. 17 No. 4, 2011
pp. 409-427
q Emerald Group Publishing Limited
1355-2554
DOI 10.1108/13552551111139647