Who Are Ethnic Entrepreneurs? A Study of Entrepreneurs' Ethnic Involvement and Business Characteristics (*)

By Chaganti, Radha; Greene, Patricia G. | Journal of Small Business Management, April 2002 | Go to article overview

Who Are Ethnic Entrepreneurs? A Study of Entrepreneurs' Ethnic Involvement and Business Characteristics (*)


Chaganti, Radha, Greene, Patricia G., Journal of Small Business Management


This article proposes that the term "ethnic entrepreneur" should be defined by the levels of personal involvement of the entrepreneur in the ethnic community instead of reported ethnic grouping. It hypothesizes that significant differences in personal and business characteristics will surface between the most community-involved and least community-involved ethnic entrepreneurs. T-tests were done on 112 Asian and Latino entrepreneurs split into top and bottom quartiles on the personal involvement scale. Results showed several significant differences between the two groups on variables relating to the entrepreneurs' background characteristics, business-related goals, cultural values, business strategies, and business performance.

* An article in the St. Louis Post Dispatch described a growing community of Bosnian immigrants and the businesses they are creating. The city now has four Bosnian restaurants, a Bosnian cafe, magazine, and three grocery stores. All these businesses were started within the last five years (Reel 1998).

* The Atlanta Constitution reports on an "international corridor" where the entrepreneurial spirit is alive and well. The businesses in this area focus on ethnic cuisine, clothing, culture, and services (Kurylo 1998).

* In Denver, Jack Martinez's family reports being in Colorado for 350 years, originally arriving from Spain. The Martinez family now runs The Chile Shop, a food and gift store primarily serving more recent immigrants (Smith 1997).

These vignettes illustrate the complexity of the phenomenon of ethnic entrepreneurship. The first example from St. Louis describes a process that has gone on for centuries all around the globe--recent immigrants creating new businesses in order to survive. The Atlanta example describes one potential outcome of this Process--an identifiable ethnic enclave, serving primarily co-ethnics and employing largely co-ethnics. The enclave is a result of not only growing numbers of new arrivals in the ethnic group, but also of the creation of a close-knit community. The final example is more complex. The arrival of the Martinez family occurred only 28 years after the Pilgrims celebrated their first Thanksgiving. While they are clearly not immigrants, they provide ethnic-related goods and services to new immigrants. Thus, questions concerning who is an ethnic entrepreneur and why we care are becoming more confusing.

Ethnic Entrepreneurship

Ethnic entrepreneurship can be defined as "a set of connections and regular patterns of interaction among people sharing common national background or migration experiences" (Waldinger, Aldrich, and Ward 1990, p. 3). So far so good. However, identification of ethnic entrepreneurs is often operationalized by self-identification as belonging to a particular ethnic group or assignment to a group according to an ethnically identified surname. Conceptual clarity on this matter is important for two seemingly diametrically opposed reasons. First, ethnic entrepreneurship has been hailed as a means to economic security for members of ethnic groups and has been used as a foundation to question the lack of higher rates of African-American entrepreneurship (Light 1972; Bates 1994). Second, although the U.S. government does not have an ethnic entrepreneurs category, by their nature as members of minorities these entrepreneurs are often included in public policy discussions and programs for economic assistance programs, i ncluding set-asides, financial assistance, and entrepreneurial education and training.

Three terms are used most often in discussing non-Caucasian entrepreneurs: ethnic entrepreneurs, immigrant entrepreneurs, and minority entrepreneurs. Ethnic and immigrant entrepreneurs are the two most often co-mingled, primarily due to the theoretical framework used that conceives immigrant entrepreneurs as minority groups. Middleman minority theory explains the arrival of a stranger into a new locale where he (almost entirely discussed as male) is a minority by virtue of race, ethnicity, or religion (Simmel 1950; Rinder 1958). …

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