Academic journal article Revue Canadienne des Sciences de l'Administration

The Origins of Self-Employment in Ethno-Cultural Communities: Distinguishing between Orthodox Entrepreneurship and Reactionary Enterprise

Academic journal article Revue Canadienne des Sciences de l'Administration

The Origins of Self-Employment in Ethno-Cultural Communities: Distinguishing between Orthodox Entrepreneurship and Reactionary Enterprise

Article excerpt

Abstract

This article identifies the specific explanatory variables of self-employment prevalent among ethnocultural groups. An interdisciplinary literature review results in the identification of several schools of thought suggesting four spheres of influence: the individual or self, the ethnocultural environment, the circumstances in society, and a combination of these. A conceptual framework is then developed, identifying two types of self-employment, orthodox entrepreneurship and reactive selfemployment. A model links different ethnocultural communities (from empirical studies in the literature) to the explanatory variables relative to specific ethnocultural groups.

The issue of immigration policy is a recurring one in national debates around the world, and an understanding of ethnocultural communities and enterprises has important policy implications. Given that entrepreneurship is beneficial to a country, some governments have been eager to attract immigrant entrepreneurs. A problem arises, however, as immigrant groups are seldom understood, and their culture, values, motivations, aspirations, and business and ethnic networks are even less so. (In fact, knowledge about the cultural distinctions of nonimmigrants is also lacking.) Government statistics reveal considerable disparities among the rates of self-employment of different ethnocultural communities (Dana, 1991; Waldinger & Aldrich, 1990). It would be useful, therefore, to develop an understanding of the forces which result in high rates of self-employment within various ethnic groups. By understanding the explanatory variables linked to the entrepreneurial decision, it may eventually be possible to encourage an increase in selfemployment rates.

The objective of this article is to develop a framework to facilitate the understanding of the macrosocietal forces encouraging ethnic enterprise. For the purpose of this paper, ethnic enterprise or ethnic business shall be taken to mean an undertaking by one or more persons self-identifying as being different than the mainstream society in which they reside, by virtue of belonging to a distinct group or a hybrid thereof, either by birth or by conditioning. Although many ethnic businesses are owned by immigrants, being an immigrant is not a necessary condition for owning an ethnic enterprise. The Samis of Lapland, for example, are an ethnoculturally distinct group within the Nordic countries, without being immigrants.

The paper begins with a review of entrepreneurship literature, presented according to focus. Figure 1 illustrates the corresponding elementary variables. A sampling of studies is classified in Figure 2, according to relevant explanatory variable(s). Figure 3 illustrates the discussion about forces influencing self-employment. As demonstrated in Table 1, some explanatory variables are more relevant to some ethnocultural groups than to others. Figure 4 serves as a framework to classify samples according to relevant macrosocietal explanatory variables.

Towards a Theory of Ethnic Enterprise

A common finding is that ethnic enterprise is often overrepresented in the small business sector, i.e., members of some ethnocultural groups typically have a higher rate of business formation and ownership than do others. It is also well established that while a high rate of self-employment is a consistent characteristic of some ethnic communities around the world and in contrasting environments, among other groups, entrepreneurs and owner-managers are much less common. Why are some ethnocultural groups more involved than others in selfemployment? How do individuals from ethnocultural communities with nonentrepreneurial cultures engage in entrepreneurial behaviour? Which explanatory variable(s) are relevant to ethnic enterprise in specific ethnocultural communities?

Over the years, different explanations have been put forth. To Weber (1956), the explanatory variables were cultural values. …

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