Ethnic Differences in Self-Employment among Southeast Asian Refugees in Canada [*]

By Johnson, Phyllis J. | Journal of Small Business Management, October 2000 | Go to article overview

Ethnic Differences in Self-Employment among Southeast Asian Refugees in Canada [*]


Johnson, Phyllis J., Journal of Small Business Management


With limited or non-transferable skills, lack of fluency in English, and the need to become self-supporting, refugees and immigrants historically have turned to ethnic entrepreneurship, resulting in successful immigrant businesses (Bonacich 1987, Gold 1992). When the Boat People from Vietnam and Laos arrived in North America during 1979-81, there was speculation about how they would fare in an employment market for which their skills and training might be lacking or inappropriate. For this large group of refugees, self-employment might be the effective strategy it had been for earlier immigrants in North America.

This article assesses differences in self-employment among three distinct groups of Southeast Asian refugees who settled in British Columbia, Canada. The three groups are Chinese Vietnamese, ethnic Vietnamese, and Laotian. Identifying the types of businesses established, the characteristics of those involved, and the markets served provides information about the contribution of Southeast Asian refugees to their new country. This is particularly important at a time when controversies over the contribution of immigrants and refugees to the Canadian and U.S. economies are prevalent. Ethnic comparisons identify common as well as unique characteristics of each group's approach to self-employment and broaden the research on the role of self-employment in the economic adaptation of refugees.

Reasons for Self Employment

Both culture and disadvantage theory help explain why immigrants become self-employed (Light 1980). According to culture theory, individuals from a culture that is predisposed to business are likely to engage in business enterprises when they settle in another country. Disadvantage theory suggests that immigrants whose education and professional training are not marketable, whose language skills are limited, and who experience discrimination in the non-ethnic labor force may start a business to support themselves.

Establishing and Maintaining Ethnic Businesses

Because the Boat People arrived with limited or no financial resources, those who started a business had to postpone doing so until they could obtain a loan and/or save enough money. Personal savings is the most common initial financing for minority businesses (Feldman, Koberg, and Dean 1991). Additional sources have included rotating credit and saving associations organized by a group of refugees to provide financing for small businesses (Chotigeat, Balsmeier, and Stanley 1991), personal savings from extended family and friends, and loans from Chinese investors in North America or off-shore. Because of their flexibility, these sources seem to have been preferred over the more formal options available from banks (Gold 1992).

Geographic concentration of an ethnic group is advantageous to its ethnic businesses, as proximity gives them easy access to consumers and workers from the group (Gold 1992). For this reason, this study focused on the Southeast Asian communities in Vancouver, British Columbia. When the Boat People arrived in this area, there was already a large Chinatown. Since the mid-1980s, there has been increased immigration from Hong Kong. Between 1981 and 1991, Hong Kong immigrants made up 7.8 percent of the 1.2 million immigrants to Canada; Vietnamese immigrants constituted 5.6 percent of this cohort. In 1991, 70 percent of recent immigrants in Vancouver were from Asia and the Middle East (Badets 1993). Thus, there appear to be enough co-ethnics in the area to provide Asian businesses with funds, markets, suppliers, employees, and customers.

Although this geographic concentration might have favored Cantonese-speaking refugees, who could find employment with Chinese businesses (Buchignani 1988), the Chinese Vietnamese were not any more likely than the Vietnamese or Laotians to find employment in Asian businesses (Johnson 1988). Furthermore, Chinese Vietnamese who worked in Chinese restaurants did so out of necessity, not preference (Indra 1988). …

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