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Ethnic Enterprise in America: Business and Welfare Among Chinese, Japanese, and Blacks

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Full reprint: Go to website. http://www.sociology.ucla.edu/professors/IVAN%20LIGHT/?id=9 Examines the sociological causes for differences in small business formation and other personal finance trends among Chinese and Japanese immigrant communities and African-Americans in the late nineteenth and early twentieth centuries. Incorporating both a broad overview of the experience of these minority groups in the face of discriminatory practices with an examination of historical data, the authors review the role played by special consumer demands, informal credit facilities and formal banking operations, and features of immigrant and African-American social organizations on rates of small business ownership, representation in professions, and insurance subscription. The unique consumer demands of immigrant communities, demands that were not shared by the native African-American community, is held to explain some of the increased rates of business ownership by Asian immigrants in light of their pre-existing understanding of that consumer demand. Nevertheless, the author notes that roles of traditional Asian forms of business organization had been overlooked and these modes of organization also help explain the higher rates of ownership. Similarly, traditional credit practices, in particular, the Chinese hui, the Japanese ko or tanomoshi, and the West African esusu, are investigated. These credit arrangements aided disfavored minority groups in obtaining credit for business operations that were otherwise unavailable to them in the formal capital markets. The socioeconomic circumstances of African slaves in the Caribbean is contrasted with that in North America to trace the disappearance of the esusu among African-Americans. The salubrious effect of informal credit facilities is further supported by an examination of the successes of Afro-Caribbean immigrants who retained the esusu in their cultural repertoire. Minority-operated banks met with less success and diminished investment opportunities is determined to be a significant cause of the problem. The latter half of the book affords an extensive treatment of the historical facts of minority social and religious organizations and the sociological theories that may explain the variety of forms those organizations took. The effect that these organizations had on trends regarding mutual aid, recourse to public assistance, and insurance purchases is an additional focus. (CAR)
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... York played a large part in facilitating the ethnic economy, for example by providing trust among members of the community. Light and Paden (1973) described ethnic community support as regulating not only cultural norms and values but also prices, resources and competition within the ethnic economy. Similar findings led Zhou (2004) to frame the concept of "ethnic solidarity" (p. ...
... Ethnic and migrant entrepreneurship have four major consequences for economies and migrant individuals (Zhou, 2004). Firstly, ethnic entrepreneurship creates job opportunities both for the entrepreneurs as well as for those members of the community who are excluded from the domestic job market (Light & Paden, 1973;Perez, 1986). Secondly, ethnic entrepreneurship allows for a possibility for migrants to evade competition within the native labor market, for example through the creation of own employment possibilities (Light & Roach, 1996). ...
... However, while being faced with many obstacles on the path to self-employment, refugee entrepreneurs also seem to have a unique set of resources at hand. As seen in the concept of ethnic economy (Light & Paden, 1973;Light et al., 1994), migrants may profit from access to ethnic consumer and labor markets. Extending these findings, Gold (1992) explains that refugee aid programs and investment funds had a positive effect on entrepreneurship by Vietnamese and Soviet refugees in the US. ...
Thesis
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In line with the emergence of large-scale refugee streams in the Middle East, Sub-Saharan Africa or South America, refugees have become a focus point of public interest around the globe. Interest in the topic of refugees has also carried over to entrepreneurship researchers, who are slowly beginning to investigate the topic of refugee entrepreneurship, after witnessing its emergence as a distinct field from migrant- and ethnic entrepreneurship. Similarly, entrepreneurship in adverse conditions is a field of growing interest, with researchers investigating sources of adversity, such as war or conflict, and their impact on entrepreneurship. However, despite the prevalence of refugee populations in countries characterized by adversity, research on refugee entrepreneurship in adverse conditions is scarce. In this study, building on the status quo of entrepreneurship in adverse conditions and refugee entrepreneurship, I am utilizing an inductive, qualitative multiple case study of nine Syrian refugee entrepreneurs in the adverse conditions of revolution-struck Lebanon to investigate refugee entrepreneurship in adverse conditions. Using this approach, I am able to describe the antecedents, drivers, challenges and outcomes of refugee entrepreneurship in such settings, considering elements from the political, social, individual and situational spheres. I am thereby adding to the theoretical debate by providing the first holistic, detailed model of refugee entrepreneurship in adverse conditions, allowing future researchers to examine the topic in a novel, holistic framework. I ultimately also provide guidance to policy makers and non-governmental organizations (NGOs) dealing with refugee entrepreneurship, highlighting both its potentials and pitfalls.
... immigrant entrepreneurs typically rely on the social capital of ethnic networks or family relations to secure critical resources necessary to form and exploit a new venture (Bonacich & Modell, 1980;Kalnins & Chung, 2006;Light & Paden, 1973;Palloni, et al., 2001;Portes, Guarnizo & Haller, 2002;Portes & Sensenbrenner, 1993). In particular, newly arrived immigrants with few resources of their own receive assistance from other more established individuals in their ethnic network (Kalnins & Chung, 2006). ...
Article
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This paper considers migrants on a continuum in terms of voluntariness of departure and intended timeframe in the new location. The corresponding 2 × 2 framework offers a theory-driven typology with which to consider four groups: exiles, sojourners, immigrants, and refugees. We apply the framework to the topic of migrant entrepreneurship, demonstrating the need for separate consideration of refugee and immigrant entrepreneurs. We propose ways in which types of capital differ between the two and discuss how differences affect entrepreneurial endeavors. The framework extends scholarship on migrant entrepreneurship, while providing a nomological net for improved theorizing for a range of migrant situations.
... However, it was cautioned that performance pay used as a tool of control, instead of motivation, could lead to lower satisfaction in employees (Frey & Jegen, 2001). Several studies have shown that the groups who found their access to good jobs was limited because of discrimination were frequently attracted to small business ownership (Bonacich, 1973;Borjas, 1986;Light & Paden, 1973). ...
Article
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Chapter
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This paper examines entrepreneurship as a way to overcome labor market discrimination. Specifically, we examine entrepreneurship as a career choice for formerly incarcerated individuals, a group of individuals who face substantial discrimination in the labor market. Using the United States National Longitudinal Survey of Youth 1997 data, we find that formerly incarcerated people are more likely to become entrepreneurs compared to individuals without a criminal record. We take advantage of an exogenous state and county level policy shock "Ban-the-Box" in the United States to further disentangle the underlying mechanism of how labor market discrimination affects formerly incarcerated individuals in their entrepreneurial choices. The findings suggest that entrepreneurship is a viable alternative career choice for formerly incarcerated people, yielding both higher income and lower recidivism rates. In addition to reporting robustness checks and addressing alternative explanations, we discuss theoretical, empirical, and policy implications.
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Research Summary We argue that the anti‐immigrant backlash sparked by globalization's skeptics isolates U.S. minority entrepreneurs as outsiders, which constrains their domestic business opportunities. In response, these entrepreneurs leverage their shared ethnic identities as insiders within diaspora networks to pursue international expansion opportunities focused on their countries or regions of origin. We hypothesize that diasporas imprint minority entrepreneurs with risk preferences that reduce their skepticism about globalization, while increasing their caution about overcommitting resources. Analyzing over 20,000 U.S. small businesses, we find evidence that minority entrepreneurs' firms prefer to leapfrog into markets, mitigate risks via contractual and bounded commitments, and target countries that are more ethnically and linguistically fractionalized. We extend internationalization process research with theory and evidence about how diasporas influence firm‐level strategic risk management decisions. Managerial Summary Increased skepticism about globalization is fueling an anti‐immigrant backlash in multi‐ethnic societies such as the U.S. This backlash may limit opportunities for immigrant entrepreneurs from ethnic minority communities to expand domestically, potentially motivating them to expand internationally. We investigate diaspora networks as a source of competitive advantage for minority entrepreneurs' firms. We find evidence that diasporas positively influence minority entrepreneurs' risk perceptions and attitudes toward globalization, leading their firms to prefer internationalizing faster, committing earlier, and targeting more fragmented markets than other firms. Diasporas counteract skepticism about globalization. We recommend that managers utilize diasporas' access to resources, knowledge, and relationships to reduce their firms' risks of internationalizing and that policymakers tailor government trade promotion programs to leverage diasporas to reduce transaction costs and increase exports.
Chapter
In this chapter, we briefly summarize the literature related to the innovative activity of businesses with different demographic categories of ownership (Link & Strong, 2016). The dominant portion of this literature has focused on gender compared to minority ownership, and we reach that conclusion based on the amount of published research on each topic. Perhaps one explanation for the dominance of gender-related research on innovative activity rests in the fact that there is a paucity of data related to minority ownership and related business activities.
Chapter
Somewhat surprisingly, the initial contraction of the New York City economy during the initial onset of the Great Depression of the 1930s was less severe than that experienced by other large U.S. cities. But the City’s economy recovered more slowly than the nation as a whole between 1933 and 1937, contracted more severely through the renewed downturn in 1937 and 1938, and underperformed the rest of the country during the renewed recovery. By the eve of World War II economic conditions in New York were significantly worse than in the average metropolitan area. This chapter identifies the characteristics of New York’s economy that determined this Depression-era trajectory.
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