Transnational vs. Domestic Immigrant Entrepreneurs: A Comparative Literature Analysis of the Use of Personal Skills and Social Networks

By Solano, Giacomo | American Journal of Entrepreneurship, December 2015 | Go to article overview

Transnational vs. Domestic Immigrant Entrepreneurs: A Comparative Literature Analysis of the Use of Personal Skills and Social Networks


Solano, Giacomo, American Journal of Entrepreneurship


Introduction

This paper addresses the topic of transnational entrepreneurship, which has emerged in recent years as one of the most promising areas of research in the studies on immigrants and their economic activities. Transnational entrepreneurship refers to cross-border entrepreneurial activities conducted by (foreign born) immigrant entrepreneurs (Drori et al., 2009).

The topic of transnational entrepreneurship appears socially relevant for two reasons. First, although statistical data on the number of immigrants involved in business connections abroad are not available, some previous studies have shown that a significant number of immigrant entrepreneurs develop transnational business practices (Bagwell, 2015; Portes et al., 2002; Tan, 2008; Wang & Liu, 2015). Second, with the increasing possibility and amount of cross-border movement and communication, one may expect that a growing number of immigrants will conduct entrepreneurial activities in various countries. For many immigrants, transnational entrepreneurship may represent a manner in which to avoid establishing low-profit businesses and contrasting the crisis in the country of immigration. Clarifying the specific features of immigrants' transnational business activities is also important in allowing policy makers to better understand and eventually foster this phenomenon.

In the literature, there is an increasing corpus of research on the topic of transnational entrepreneurship. These studies are both theoretical (e.g., Chen & Tan, 2009; Drori et al., 2009) and empirical (e.g., Kariv et al., 2009; Patel & Terjesen, 2011; Portes et al., 2002). The empirical studies have analyzed, among other topics, the roles of personal skills and contacts in business practices. In this article, I use the term business practices; the articles considered have used various dependent variables such as identifying and exploiting opportunities, sector choice, internationalization choice, creation of the business, and business success. "Business practices" is a more generic term and includes all of these concepts.

However, it remains unclear whether findings from previous research on immigrant entrepreneurs with a transnational business (TIEs) are peculiar to this particular group or apply to all immigrant entrepreneurs.

To fill this research gap, this article summarizes previous findings on the use of personal skills and social contacts in business practices, distinguishing between transnational immigrant entrepreneurs (TIEs) and the general category of immigrant entrepreneurs (domestic immigrant entrepreneurs, DIEs). The literature review is a component of a larger research project on the topic of transnational immigrant entrepreneurship. The project compares the resources used in a business by domestic entrepreneurs and transnational entrepreneurs, focusing on Moroccan entrepreneurs in Amsterdam and Milan. The preliminary findings of the project are illustrated in Solano (2014 and 2015a), and they are included in the literature review.

The goal of the paper is to answer the following general question: Are TIEs different from DIEs in terms of personal skills and social contacts (and the use entrepreneurs make of these skills and contacts)? In particular, two topics are addressed: the use of personal skills in business and the use of social contacts. Two sub-questions arise from these two topics:

a. Which personal skills do TIEs use in business? Are these skills different from the skills employed by DIEs?

b. What is the role of social contacts in developing transnational businesses? Do TIEs and DIEs differ in terms of social network characteristics and the use of those characteristics?

Analyzing the extant literature, this article provides a starting point for clarifying some peculiarities of transnational entrepreneurship in relation to those entrepreneurs' business practices.

The paper is organized into the following four sections: a theoretical framework on transnational entrepreneurship, the methodological approach, the review of the findings of previous studies on the topic, and the discussion of the primary differences between the two groups. …

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