The Balancing Act: The Role of Transnational Habitus and Social Networks in Balancing Transnational Entrepreneurial Activities

By Patel, Pankaj C.; Conklin, Betty | Entrepreneurship: Theory and Practice, September 2009 | Go to article overview

The Balancing Act: The Role of Transnational Habitus and Social Networks in Balancing Transnational Entrepreneurial Activities


Patel, Pankaj C., Conklin, Betty, Entrepreneurship: Theory and Practice


Transnational entrepreneurship is becoming an increasingly important global phenomenon with enormous impact on economic, social, and political structures worldwide. Drawing on Bourdieu's theory of practice, we assess how transnational entrepreneurs (TEs) may balance their network scope and network size in dual environments to enhance their ability to operate in both environments. Using a sample of 452 U.S. Latin American TEs, we find that balanced network size and network scope in the respective institutional settings enhance the degree of transnational venture activities. More importantly, we find that the joint effects of balancing network size with network scope are significantly greater than their individual effects.

Introduction

As global boundaries diffuse, the emergent phenomenon of transnational entrepreneurship continues to gain considerable interest (Drori, Honig, & Ginsberg, 2006; Portes, Guarnizo, & Hailer, 2002). Historically, it has been assumed that an entrepreneur commercializes an opportunity within a single institutional setting. However, several factors of globalization, including free trade, increasingly sophisticated lifestyles, and decreasing transportation and communication costs, have dramatically enhanced entrepreneurs' abilities to conduct new venture activities across different institutional settings. Transnational entrepreneurs (TEs) leverage capital across dual environments, creating the potential to produce greater economic rents than those generated by operating in a single environment, and enabling TEs to exploit comparative advantages beyond those possible by free market agreements alone. Thus, the transnational entrepreneurship process has important implications not only for individuals, but also for markets and economies.

To uncover and explain the process of transnational entrepreneurship, recent research has focused on the descriptions of structures (Basch, Schiller, & Blanc, 1994; Faust, 1988; Rouse, 1992) and processes (Evans, 2000; Guarnizo, Sanchez, & Roach, 1999; Kastoryano & Transnational Communities Programme, 1998) involved in transnational entrepreneurial activities. Others have explored how an immigrant entrepreneur's degree of assimilation in the host country and access to human capital may play a significant role in the choice of whether to become a TE (Portes, Guarnizo, & Landolt, 1999).

Most recently, a theoretical framework of the transnational phenomenon through Bourdieu's theory of practice framework has been presented. This framework suggests that successful transnational entrepreneurship requires mobilization of social networks, and balancing the degree of dual embeddedness in two different institutional settings (Drori et al., 2006). However, to our knowledge, empirical tests examining the nature of social networks in dual environments and the impact on transnational entrepreneurial activities remain unexplored. Additionally, factors that lead individuals to engage in transnational entrepreneurship have been examined (Pones et al., 2002), but much less is known about which factors enhance their ability to effectively manage transnational entrepreneurial activities. The degree of success in balancing the two environments may lead to increased ability to leverage resources and capabilities, enabling TEs to enhance their venture outcomes (Drori et al., 2006), and increase their chances of success. Therefore, we pose the following research question: How do TEs mobilize social networks in dual environments to enhance transnational entrepreneurial activities?

To answer this question, we invoke and expand on Drori et al.'s (2006) pioneering work from the perspective of Bourdieu's theory of practice (Bourdieu, 1977). Bourdieu's epistemic position is that the process of social construction must take into account the mutual relationship between mental structures and the world of objects (Sewell, 2005, p. …

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