Academic journal article Michigan Sociological Review

A Theoretical and Empirical Foundation for the Study of Suburban and Rural Ethnic Economies in the United States

Academic journal article Michigan Sociological Review

A Theoretical and Empirical Foundation for the Study of Suburban and Rural Ethnic Economies in the United States

Article excerpt


Ethnic economies include "the ethnic self-employed and employers, and their co-ethnic employees" (Light and Karageorgis 1994:649). Workers in ethnic businesses-meaning those firms that operate within the boundaries of the ethnic economy-use shared co-ethnic identity to facilitate economic activities, such as raising start-up capital or learning trade skills.1 Examples of ethnic economies include the panoply of Cuban-owned and operated businesses in Miami (Portes and Bach 1985), the heavily service-oriented Dominican business cluster in New York City (Gilbertson and Gurak 1993), and the collection of gas stations run by Lebanese immigrants in Detroit, MI (Abdulrahim 2009). A wealth of research has analyzed ethnic economies in traditional immigrant gateways, including New York, Los Angeles, Chicago, San Francisco, and Houston (Nee and Nee 1973; Waldinger 1986; Light and Bonacich 1988; Raijman and Tienda 2003; Valdez 2011). Nevertheless, immigrants and ethnic minorities are rapidly moving away from these parts of the United States to new immigrant destinations, including many rural and suburban parts of the country (Marrow 2005; Massey and Capoferro 2008; Singer, Hardwick, and Brettell 2008). The immigrants and ethnic minorities moving to rural and suburban areas are creating vibrant business clusters, sometimes revitalizing local economies that are shrinking from population loss or enduring increases in poverty (Wood 1997; Grey and Woodrick 2005; Zarrugh 2007; Li 2009; Furuseth 2010:54; Liu and Abdullah! 2012; Kneebone and Berube 2013).

This article takes existing, urban-oriented theories of how and why ethnic economies grow and adapts them to a suburban and rural U.S. context. Although theories explaining ethnic economy growth are not inherently urban in orientation, they have often been applied to U.S. ethnic economies using assumptions that imply an urban condition. This is understandable, since almost all U.S. ethnic economies have historically existed in large cities. Today's ethnic economies, however, are rapidly spreading into parts of the suburban and rural United States, in which traditional ethnic economy theory requires translation. After discussing the need for the revision of existing ethnic economy theory for nonurban, U.S. ethnic economies, I present an explanatory typology of nonurban ethnic economies from which testable hypotheses are derived. I then provide operationalizations of each theoretical concept so that each hypothesis can be tested empirically. In the conclusion, I describe some future directions and limitations of adopting the explanatory typology in empirical research.


Ethnic economies arise when there are market opportunities for ethnic entrepreneurs. These market opportunities commonly come in the form of ethnic, volatile, or abandoned markets (Waldinger et al. 1990). Ethnic markets comprise ethnic minorities who demand goods and services not supplied by mainstream businesses. These can include ethnic groceries or travel services. Volatile markets are those in which demand is unstable and fluctuating, such as the garment or construction industries (Waldinger 1986). Abandoned markets include consumers whose needs are underserved or outright ignored by mainstream businesses. For instance, Korean-owned grocery stores serve low-income African American neighborhoods in Los Angeles because large supermarkets choose not to locate there (Light and Bonacich 1988). It is important to note that regardless of the market opportunity that encourages ethnic economies to grow, the ethnicity of the customer base is not a defining feature of an ethnic economy. The ethnic economy can serve co-ethnic and nonethnic markets equally.

Ethnic entrepreneurship and worker participation in the ethnic economy do not merely appear as a result of demand. Supply factors also affect the degree to which business owners and workers join the ethnic economy (Light and Gold 2000:16-18). …

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