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Diversity of Entrepreneurial Perceptions: Immigrants vs. Native Population: Entrepreneurial Perceptions of Immigrants

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The purpose of this study was to investigate the differences between immigrants and the native-born population concerning estimations of the feasibility of becoming an entrepreneur, and to examine the relationship between the propensity for risk-taking and the perceived feasibility of becoming an entrepreneur. The paper developed the renewed application of the entrepreneurial intentions model, with perceived feasibility to be an entrepreneur expressed as an assessment of opportunity to act, and risk-taking propensity derived from an assessment of opportunity to succeed. This renewed approach enabled us to explain the paradox between immigrants' high entrepreneurial motivation and low perceived feasibility of becoming an entrepreneur based on the risk homeostasis theory. The high level of apparent immigration-related risks experienced by immigrants in the past affects their risk-taking propensity, thus decreasing their perceived feasibility of establishing businesses.
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Diversity of Entrepreneurial Perceptions:
Immigrants vs. Native Population
NONNA KUSHNIROVICH
1
,SIBYLLE HEILBRUNN
2,3
and LIEMA DAVIDOVICH
4
1
Department of Economics and Management, Ruppin Academic Center, Emek Hefer, Israel
2
School of Social Sciences and Humanities, Kinneret Academic College, Sea of Galilee, Israel
3
University of Haifa, Haifa, Israel
4
Department of Economics and Accounting, Ruppin Academic Center, Emek Hefer, Israel
The purpose of this study was to investigate the differences between immigrants and the native-born population
concerning estimations of the feasibility of becoming an entrepreneur, and to examine the relationship between the
propensity for risk-taking and the perceived feasibility of becoming an entrepreneur. The paperdeveloped the renewed
application of the entrepreneurial intentions model, with perceived feasibility to be an entrepreneur expressed as an
assessment of opportunity to act, and risk-taking propensity derived from an assessment of opportunity to succeed.
This renewed approach enabled us to explain the paradox between immigrantshigh entrepreneurial motivation
and low perceived feasibility of becoming an entrepreneur based on the risk homeostasis theory. The high level of
apparent immigration-related risks experienced by immigrants in the past affects their risk-taking propensity, thus
decreasing their perceived feasibility of establishing businesses.
Keywords: entrepreneurial intentions; immigrants; risk-taking; feasibility of becoming an entrepreneur
Introduction
Entrepreneurship and immigration are inextricably linked
concepts. Immigrant entrepreneurship was one of the vital
factors of the economic development in the American
New World beginning in the late fifteenth century.
Immigrants have made huge contributions to the
development of American economy and technology, and
continue to do so as far as the immigration policy permits
(Acs, 2006). Entrepreneurship in general and immigrant
entrepreneurship in particular, have played an important
role in the acceleration of productivity growth, stimulating
innovations and competition (Eraydin et al., 2010;
Audretsch et al., 2011), especially in high-income
countries (Acs, 2006).
However, in the twenty-first century, which is
characterized by markedly increased immigration,
entrepreneurial intentions of immigrants are less clear-cut.
Data from OECD countries show that the overall mean
rates of immigrant and native entrepreneurship are similar,
though there are significant differences among countries.
Following the report on migrant entrepreneurship in
OECD countries (OECD, 2010) immigrants are on average
only slightly more entrepreneurial than natives: overall,
about 12.7% of immigrants are involved in entrepreneurial
activities compared to 12.0% of natives. While in countries
such as Australia, the United Kingdom, France, Belgium,
Denmark, Sweden and Norway the share of entrepreneurs
in total employment is 1.5 to 2.9 percentage points higher
for immigrants than for natives, in Portugal, Spain, Italy,
Greece, Ireland, Germany, Austria and Switzerland
immigrants have a relatively lower self-employment rate
than natives (OECD, 2010). Thus, in many countries
immigrantsrates of entrepreneurship are lower than those
of the native population.
The issue of perceived feasibility of becoming an
entrepreneur is of great importance, especially for
immigrants who often face difficulties entering the host
countrys labor market, and who meet many constraints
in recruiting financial, informational and social resources
for setting up businesses (Heilbrunn and Kushnirovich,
2007). Better understanding of the relative low rates of
immigrant entrepreneurship is valuable since it may
contribute to the development of policies that foster
economic integration of immigrants, which is a major
component of their overall integration.
The purpose of this study was to investigate the
differences between immigrants and the native-born
Correspondence: Nonna Kushnirovich, Department of Economics and
Management, Ruppin Academic Center, Emek Hefer 40250 Israel, Tel:
+(972)98983850, Fax: +(972)98987604. E-mail: nonna@ruppin.ac.il
European Management Review, (2017)
DOI: 10.1111/emre.12105
©2017 European Academy of Management
population concerning their estimations of the feasibility
of becoming an entrepreneur, to examine the relationship
between the propensity for risk-taking and the perceived
feasibility of becoming an entrepreneur, and to examine
the determinants that predict an immigrantsfeasibility
of becoming an entrepreneur. The study focuses on
immigrant and native-born populations in Israel, where
the rate of immigrants turning to entrepreneurship is lower
than that of veteran Israelis (Lerner and Hendeles, 1996).
Of all immigrants who came to Israel since 1989, 85%
were from the Former Soviet Union (hereafter FSU),
establishing the largest group of immigrants in Israel
during that period; therefore the present study focuses on
that population.
We begin with the theoretical approaches that deal with
perceived feasibility of becoming an entrepreneur. An
attempt is made to solve the contradictory observations
as to the rate of entrepreneurship among immigrants. In
the second section of the paper we describe data
collection, demographics of the sample, and measures.
Results are presented in the third section which is devoted
to differences in estimations of the feasibility of becoming
an entrepreneur and risk-taking propensity between FSU
immigrants and Israeli-born persons. Findings regarding
the relationship between perceived feasibility of becoming
an entrepreneur and the propensity for risk-taking, and an
examination of the factors that predict perceived
feasibility of becoming an entrepreneur are presented.
Theoretical framework
Intention based model
According to the model of planned behavior developed by
Ajzen (1991), a persons intention is the immediate
antecedent of behavior: the stronger the intention to
engage in a behavior, the more likely it will be performed.
Intentions are the single best predictor of planned behavior
in entrepreneurship (Krueger et al., 2000). Investigation of
entrepreneurial intentions is of great importance because it
helps explain what shapes entrepreneurial behavior.
According to the theory of planned behavior, intentions
depend jointly on attitudes toward behavior (the degree
to which a person has a favorable or unfavorable
evaluation of considered behavior), social norms, and
feasibility (behavioral control) to do it. An individual
would not become self-employed if either willingness
(motivation) or opportunity is absent (Van Praag and
Van Ophem, 1995), however the question is what is the
contribution of each component to the decision to become
an entrepreneur.
Krueger (1993) examined Shaperos (1975) intention-
based model of new venture creation. This model assumes
that the intent to start a new business is the result of
perceived desirability, feasibility, and the individuals
propensity to act upon opportunities. Entrepreneurial
intention is defined as commitment to starting a new
business. An understanding of these intentions is
important as it helps to identify key characteristics of
new firms. The decision to start a new business requires
some type of precipitating event and perception that
starting a new business is plausible. Krueger (1993) found
that perceived feasibility, perceived desirability and the
propensity to act explain more than 50% of the variance
in the intention to become entrepreneurial, and that
feasibility perception explains the most variance (Krueger
et al., 2000). Thus, perceived feasibility is the degree to
which an individual feels personally capable of starting a
business undertaking. Desirability to set up a business
can be studied by investigation of personal motivations.
In the literature on entrepreneurial action, the
opportunity to act (the so-called opportunity to try)is
distinguished from the opportunity to succeed (regarding
setting up a business, the opportunity to profit)
(McMullen, 2015; Ramoglou and Tsang, 2016).
Opportunities to try are the situations about which
entrepreneurial decisions are made (McMullen, 2015).
Assessment of such opportunities is expressed in
perceptions of feasibility to be an entrepreneur. McMullen
and Shepherd (2006) posit that feasibility of
entrepreneurial action relates to the amount of uncertainty
perceived, and desirability or motivation relates to the
willingness to bear uncertainty. Opportunity to succeed
can be assessed through prospective actorsjudgements
and beliefs that the outcomes of the activity justify bearing
the uncertainty needed to attain these outcomes. Petrakis
(2004) claimed that the risk premium enjoyed by the
economic agent is the entrepreneurship premium. Based
on these statements, risk-taking propensity may express
personal judgements about the opportunity to succeed.
While risk-taking propensity (as explained in the
following paragraph) concerns the perceived opportunity
to succeed via actions, perceived feasibility accounts for
perceived opportunity to become an entrepreneur by being
able to recruit resources necessary to set up a business.
Risk-taking as a component of immigrantsperceived
feasibility of becoming an entrepreneur
Risk-taking is an important component of personal
intrinsic entrepreneurial orientation. The term risk-
takingis widely assumed in the economic literature.
Rothschild and Stiglitz (1970) declared that an individual
with an unknown utility function who prefers a less risky
alternative to riskier alternatives, according to the integral
rules, is a risk averter. It is usually assumed that the more
risk-averse a person is, the less he/she is involved in
entrepreneurial activity. In contrast, risk propensity is the
tendency to take actions that one has judged to be risky
(Sitkin and Pablo, 1992).
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©2017 European Academy of Management
In order to act entrepreneurially, people need not have a
high tolerance for uncertainty if they believe that they
know what they are doing (McMullen and Shepherd,
2006). According to Sagie and Elizur (1999), the ability
to calculate risk is an important factor leading to
entrepreneurial success. Lumpkin and Dess (1996)
describe risk-taking as one of three ingredients that
strengthens entrepreneurial orientation. Wagner (2003)
found that the probability of starting a business was
negatively related to high risk-aversion. A study by van
Gelderen et al. (2005) on nascent entrepreneurs also
revealed that the perceived risk of the market was a
significant variable that explained the difference between
those who succeed in starting a business and those who
abandon the startup effort.
Apersons judgements exercised in entrepreneurial
opportunity evaluation are affected by the socio-economic
conditions in which prospective agents are embedded.
These judgements are derived from not only what an
entrepreneur does, but also who does it (McMullen,
2015). Although we are aware of the limitations of the trait
approach, focusing mainly on the question of who the
entrepreneur is (Gartner, 1989), we believe that in the
context of this paper, risk-taking is affected by a
situational variable, the individuals immigrant status.
Immigration in itself, which is not a trait but rather a
circumstance, influences the evaluation of opportunities.
In other words, being an immigrant can affect judgements
as to opportunities to succeed and risk-taking propensity.
In our context, then, we explore the question of why
individuals in our study immigrants and natives - have
different outlooks regarding the feasibility of starting a
business (as it is posited in Ramoglou and Tsang, 2016).
Immigrants are typically considered a self-selected
group, whose decision to migrate derived from their
human capital, individual characteristics such as low
personal level of risk aversion, and the earning
opportunities in the host country compared to their
country of origin (Borjas, 1987, 1994). It seems that some
selection mechanism sends the most capable and the most
ambitious persons to migrate in order to empower and
achieve higher standards of living. Constant and
Zimmermann (2006) defined immigrants as a self-selected
group of rational individuals who are willing to undertake
risks in order to maximize their lifetime earnings and
improve their life chances. They have the inner drive to
succeed in the host countrys labor market. Economic
migrants are described as tending to have more innate
ability and motivation for economic advancement; they
are more ambitious, aggressive and entrepreneurial vs.
their fellow non-immigrant countrymen (Chiswick,
1999). Thus, the degree of risk tolerance may affect the
likelihood of migration. Heitmueller (2005) found that
greater risk-averseness was associated with lower
probability of migration.
Therefore, when comparing the native population in the
country of origin with migrants, the latter should be less
risk averse. However, the risk propensity of immigrants
and natives in the receiving country might differ. The
empirical study by Bonin et al. (2006) who examined a
representative sample of immigrants in Germany
irrespective of their ethnicity, revealed that first-
generation immigrants were more risk averse than natives,
while in the second generation risk preferences appear to
equalize. Halek and Eisenhauer (2001) found that first-
generation immigrants in Michigan, USA had 13.95%
lower risk aversion than native-born Americans. These
apparently contradictory observations can be explained
by the differences between immigrants and native-born
populations (Rafiq, 1992; Clark and Drinkwater, 2000).
First, there are cultural and traditional distinctions
between these two groups; second, the risk attitudes of
immigrants and natives might be different because of the
discrepancy in their risk preferences (Bonin et al., 2006).
Immigrants are traditionally regarded as a population
that tends to gravitate towards setting up businesses
(Aldrich and Waldinger, 1990). Their motivation for
business ownership relies on opportunity recognition on
the one hand and on necessity due to environmental
factors on the other (Constant and Shachmurove, 2003;
Zimmermann, 2007). Thus, the traditional approachposits
that immigrants are more willing to start a business for
both subjective and objective reasons. Subjective reasons
include the tendency of immigrants in general to initiate
more and have high risk-taking propensity, which
significantly contributes to their entrepreneurial process
(Light, 2007). They are predisposed to seek more
venturing opportunities (Ramoglou and Tsang, 2016).
Objective reasons include environmental factors such as
immigration policy, institutional support for immigrants,
labor market barriers, and the level of skepticism in parts
of the host population such as perceived competition for
job opportunities, that influence immigrantsdecisions to
be entrepreneurs (Shuval, 2000). There is a wide range
of studies on barriers encountered by immigrants both in
the labor market and when setting up businesses (Borjas,
1994; Heilbrunn and Kushnirovich, 2007; Kogan, 2007;
Heilbrunn et al., 2010; Raijman and Kemp, 2010), but
there is a lack of studies on the relation between risk-
taking of immigrants, their motivation, and estimations
of feasibility of setting up businesses.
Following the ecological approach, socioeconomic
position and achievement are determined by the local
opportunity structure met by different groups in the labor
market (Parcel and Mueller, 1983; Lewin-Epstein and
Semyonov, 1986). Nee et al. (1994) maintain that
theoretical frameworks of human theories explain
immigrantslabor market disadvantage. While some
individuals are strongly pulled into self-employment if it
offers higher earnings, immigrants sometimes are pushed
Entrepreneurial Perceptions of Immigrants 3
©2017 European Academy of Management
into self-employment due to the discrimination that they
experience (Constant and Zimmermann, 2006).
Discrimination against ethnic minorities and immigrants
in paid-employment is a contributory factor to the over-
representation of minority workers in self-employment
(Clark and Drinkwater, 2000). Therefore, immigrants are
impelled to set up businesses by the obstacles that they
encounter entering the labor market of the host country.
Following the self-selection theory, immigrants are
willing to take risks. They utilized this propensity when
migrating and dealing with uncertainty in their host
country. Entrepreneurs in general have higher risk-taking
propensity than other groups of populations in the labor
market. Thus, immigrants have relevant personal features
and tend to become entrepreneurs. In addition, immigrants
usuallyhavetodealwithmanybarriersinthehost
countrys labor market, which prevent them from
becoming salaried workers. It seems apparent that
immigrants should be more willing to engage in
entrepreneurship than the native population.
For the special case of immigrants in Israel, these
theoretical statements have some implications. Israel is a
target country for immigration; immigrants constitute
about one quarter of the population. In Israel, the
government provides assistance to immigrants, starting
from their first days in Israel in all areas of life: housing,
language acquisition, job training, job placement, etc.
The government understands the importance of immigrant
entrepreneurship, and therefore facilitates access to a
range of support mechanisms. Immigrant entrepreneurs
in Israel can receive various types of governmental
support: training and guidance, financial support, and
support for creating and maintaining business links.
Studies on immigrant businesses in Israel revealed that
diversity of the support received does not affect the
businessessurvival (Lerner and Khavul, 2003), but
financial support and particularly designated loans do
facilitate setting up businesses by immigrants
(Kushnirovich, 2009). The existence of local structure
encouraging immigrantsintegration can explain the high
rates of immigrant entrepreneurship compared to the
native population, but does not explain low rates of
immigrant entrepreneurship observed in many countries
including Israel. It seems that entrepreneurial traits and
willingness to take risks might contribute to these
differences.
The alternative explanation of differences in the rates of
entrepreneurship between immigrants and the native
population, and mixed results reported by past research
on immigrantsentrepreneurship, might be the Risk
Homeostatic theory. This theory, pioneered by Wilde
(1982), contends that humans behave according to a
whole system of risks with one compensating for another.
Namely, humans behave in such a way that if risk is
identified in a given system, and is reduced by design,
then a compensatory increase in risk-taking will occur
somewhere else in the system. He defined target riskas
the level of risk a person chooses to accept in order to
maximize the overall expected benefit from an activity,
in recognition of the realization that people do not try to
minimize risk but instead attempt to optimize it. Wilde
(1998) claims that people, at any given moment, compare
the amount of risk they perceive with their target level of
risk and adjust their behavior in an attempt to eliminate
any discrepancies between the two. The phenomenon is
similar to a thermostat: this instrument controls the actions
of the heating/coolingunit, which controls the fluctuations
in the room temperature, but averaged over time, the
temperature remains stable.
Based on the risk homeostasis theory, we claim that
immigrants took risks by immigrating, and therefore
immigration might be a situation causing individuals to
reduce the estimations of their feasibility to be engaged
in entrepreneurial and innovative activity. Immigrants
who had already demonstrated a willingness to engage
in risk-taking by migrating across national borders prior
to the many obstacles of the labor market of the host
country, are thus less likely to take any additional risk
including the risk of setting up a business.
Results of many empirical studies reinforce this claim.
Individuals who are more willing to take risks are more
likely to migrate (Heitmueller, 2005; Constant and
Zimmermann, 2006), namely, they were less risk averse
before immigration. However, immigrants who have
already assumed some level of risk due to immigration
are no more tolerant of additional risks including the risk
of setting up a business. Bonin et al. (2006) maintained
that foreign nationals who had actually immigrated to
the country were in general more risk averse than natives.
Economic security drives immigrant families to seek some
mechanism to ensure their livelihoods against times of
adversity (Lucas, 2005). This finding is in line with
Hormiga and Bolívar-Cruzs (2014) study, which
examined whether exposure to the migration experience
might modify risk perceptions and, thus, modify the
inclination to become involved in entrepreneurial activity.
They found that the risk perception of immigrants, who
had not set up a business, was lower than that of native
individuals. Thus, immigrantsrisk-taking propensity is
expected to be lower than that of native-born populations,
due to their circumstantial status of being immigrants.
One can say that risk aversion depends on the
immigrant experience, when a successful experience
would make immigrants less risk-aversive and a negative
experience would make them more risk-aversive.
However, differences in risk aversion between native-
born and immigrant populations were found irrespective
of immigrantsethnicity and experience. For example,
the sample of Bonin et al. (2006) contains immigrants of
different origins (Southern Europe, Eastern Europe, and
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©2017 European Academy of Management
outside Europe) who moved to Germany at different
points of time (1960s to 1980s), and therefore had various
immigrant experiences. Moreover, Kraus and Werner
(2012) found that the less integrated migrants were into
society, the greater their tendency to take a risk of starting
a new business was. Thus, successful immigrant
experience would not necessarily be associated with
higher risk-taking propensity.
Based on the literature review, we expected that:
H1. FSU immigrants will have lower risk-taking
propensity (H1a) and lower perceived feasibility of
becoming an entrepreneur (H1b) than Israeli-born
persons.
H2. Risk-taking propensity is positively related to
estimations of the feasibility of becoming an
entrepreneur.
Based on the literature review it seems that immigrants
should be more entrepreneurial, namely, more likely to
take a risk than the native-born population. However, the
low rates of entrepreneurship indicate that immigrants do
not embody their entrepreneurial intentions. This paradox
emphasizes the importance of investigating immigrants
entrepreneurial intentions and feasibility to become an
entrepreneur. Although there is an abundance of
publications about intentions models on common
entrepreneurship (Shapero, 1975; Krueger et al., 2000),
most studies on immigrant entrepreneurship focus on
overt behavior of immigrants who had already set up
businesses, sometimes with comparisons to those who
had not, but they do not relate to immigrants who were
at the stage of examining the options of becoming
entrepreneurs. Therefore, these studies cannot explain the
existing paradox, nor the precise reasons that prevent
immigrants from implementing their intentions, whether
low desirability, restricted opportunities, or risk aversion.
This study investigates entrepreneurial intensions, and
contributes to the literature with the following potential
innovations: (1) examination of the differences in
risk-taking between immigrants and native-born persons
relative to their entrepreneurial intensions; (2) examination
of the relationship between perceived feasibility and risk-
taking, controlling for desirability (motives); and (3)
explanation of the paradox between high entrepreneurial
motivation and low feasibility of becoming an
entrepreneur based on the risk homeostasis theory.
Determinants of the decision to be an entrepreneur
There is a wide range of studies that define a set of
entrepreneurial determinants and motives. Kuratko
et al. (1997) and Robichaud et al. (2001) studied North
American entrepreneurs and revealed four categories of
motivation: extrinsic rewards, independence/autonomy,
intrinsic rewards and family security. Segal et al.
(2005) reviewed studies dealing with motivation and
found the following types of motives: external
constraints such as dissatisfaction with a workplace,
difficulties in finding work, low wages, lack of
flexibility of work hours, and internal motives such as
aspirations for independence, self-esteem, and seeking
additional opportunities. Benzing et al. (2005) assessed
motivation, and found that to be my own bossand
to increase my incomewere the highest motivational
factors, similar to the results of Benzing et al. (2005).
Xu and Ruef (2004) stressed that the motivations that
individuals have for setting up business ventures are
non-pecuniary in nature. Ryan and Deci (1999)
distinguished between extrinsic and intrinsic motivation,
based on different reasons or goals that give rise to
action. Summing up these approaches on motivation
for setting up a business, the motives can be divided
into two categories: intrinsic motivation referring to
doing something because it is inherently interesting or
enjoyable and extrinsic motivation, referring to doing
something because it leads to a tangible outcome.
Personal characteristics and human capital also play a
considerable role in the decision to set up a business. The
human capital theory implies that the best and the brightest
will become self-employed. Education in terms of variety
of skills, training and experience increases the likelihood
of business ownership (Lerner and Hendeles, 1996; Mesch
and Czamanski, 1997; Light and Gold, 2000). Gender and
age differences are also of great importance. Former studies
revealed that women are less likely to become
entrepreneurs than men (Malach-Pines and Schwartz,
2008; Xavier et al., 2013). Previous research involving
Israeli entrepreneurs has shown that in Israel, women
own one-half of all immigrant businesses, whereas Israeli-
born Jewish women entrepreneurs own only one-third of
native businesses (Heilbrunn and Kushnirovich, 2007).
Following the Global Entrepreneurship Monitor 2013,
people in the age group of 2535 are most inclined to start
a business (Xavier et al., 2013).
The importance of risk-taking propensity for
entrepreneurship was discussed in paragraph above.
Based on the above, we propose the following
determinants of immigrantsestimations of their
feasibility for becoming an entrepreneur: extrinsic and
intrinsic motives, risk-taking propensity, and
demographic characteristics (age, education, and gender).
Thus, the final hypothesis posits that:
H3. Extrinsic and intrinsic motives for setting up a
business as well as risk-taking propensity and
demographic characteristics, will significantly relate
to the perceived feasibility of becoming an
entrepreneur.
Entrepreneurial Perceptions of Immigrants 5
©2017 European Academy of Management
Method
Data collection and demographics of the sample
The target population consisted of immigrants from the
FSU who immigrated to Israel after 1980 and Israeli-born
persons who were not entrepreneurs at the time of the
survey. We decided to focus on immigrants from the
FSU because they constitute about 85% of all immigrants
who came to Israel from 1989 to date. We considered that
the cultural differences would be negligible because all
immigrants in Israel have the same ethnic background
(according to the Law of Immigration, immigrants must
be Jewish or members of Jewish families). This decision
was also supported by the fact that new business
ownership rates were almost the same in Russia and Israel:
2.3% in Russia and 2.7% in Israel (Global
Entrepreneurship Monitor (GEM), 2009). These data do
not justify the comparison since the Russian sample of
the GEM does not necessarily include Jews but rather tries
to be heterogeneous. However, the literature shows that
FSU immigrants in Israel remained culturally and socially
distinct from the culture of the host society, maintaining
their use of the Russian language and their admiration of
Russian culture (Horowitz, 1989; Remennick, 2003;
Litwin and Leshem, 2008).
FSU immigrants who arrived since 1990 differ from
other groups of immigrants in Israel also by their
motivations for migration. When other immigrants
arrived because of religion, anti-Semitic concerns, and
lack of personal security in their countries of origin,
the motives of FSU immigrants were more diverse and
included employment considerations (Amit, 2010) and
seeking economic opportunities (Lisak, 1995). Thus, as
to their motivation, FSU immigrants are rather similar
to other groups of immigrants in the world, for whom
economic and employment motives were important in
their decision to immigrate. Compared to immigrants
of other waves of mass migration to Israel, FSU
immigrants are included in the mainstream societal
context and have integrated in terms of education and
labor market participation over the years (Semyonov
et al., 2010). It is evidenced in FSU immigrants
economic and employment achievements (Smooha,
2008), their successful integration in the high-
technology branch of the economy (Smooha, 2008;
Kushnirovich and Heilbrunn, 2013), and high ability to
copy with difficulties (Heilbrunn et al., 2010)
respectively to other groups of immigrants. Although
the income of FSU immigrants is still lower than that
of the native-born population, it is higher than the
income of immigrants from Africa and Asia who arrived
to Israel at the same period, being only second to
income of immigrants from Western counties (America
and Europe) (Kushnirovich, 2013).
Data were collected in 2007 in Israel. Combining
convenience and snowball samples, 189 FSU immigrants
and 297 Israeli-born individuals from all over Israel were
surveyed via a questionnaire. We started out with a
convenience sample, asking students from the Ruppin
Academic Center (located in the center of Israel), from
Haifa University (located in the North of Israel) and from
Ben Gurion University (located in the South of Israel) to
administer the questionnaire to family members. We
proceeded with the snowball method, whereby family
members of the students suggested names of friends and
acquaintances, who were subsequently approached and
surveyed using the questionnaire.
The questionnaire was composed in both Hebrew and
Russian and administered by speakers fluent in both
languages. The respondents could therefore choose the
language of the questionnaire. The Hebrew version of
the questionnaire was compared with the Russian, using
a back-translation method and inspection by speakers
fluent in both languages in order to ensure equivalence
of meaning. The questionnaire included two parts. The
first part consisted of variables describing demographic
characteristics of the respondents. The second part of the
questionnaire described how they evaluated the feasibility
of their becoming entrepreneurs, risk-taking propensity,
and their perception of motives that could lead to setting
up businesses.
The characteristics of the sample are presented in the
Table 1. The gender distribution in our sample for both
groups of respondents was similar (47.3% male FSU
immigrants versus 52.7% female immigrants from FSU,
and 52.4% men versus 47.6% Israeli-born women).
However, other personal characteristics of FSU
immigrants in comparison with Israeli-born individuals
were very different. The most notable characteristic of
FSU immigrants was their high level of education. Over
69% of all FSU immigrants in Israel have had at least
some college education (Cohen-Goldner and Paserman,
2004). In our sample, 57.2% of FSU immigrants had an
academic degree and 22.5% had a diploma of vocational
studies, whereas only 34.9% of Israeli-born respondents
had an academic degree and only 16.4% had a diploma
of vocational studies. FSU immigrants were older than
Israeli-born individuals (FSU immigrants were 38.1 years
old versus Israeli-born persons who were 31.1 years old).
This corresponds with national statistical data, indicating
that the mean age of FSU immigrants in Israel was
36.8 years (Kushnirovich, 2007), whereas the mean age
of the Jewish population group in Israel was 31.6 years
in 2010 (Kushnirovich, 2013). This age difference can
be explained by the fact that more than 60% of the
FSU immigrants of the last wave of immigration came
to Israel before 1995 and were adults when they
immigrated (Kushnirovich, 2007). Thus, the
demographic characteristics of our sample comply with
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©2017 European Academy of Management
former research on FSU immigrants in Israel and
national statistical data.
Measures
Variables describing the respondentsdemographic
characteristics were age (a continuous variable measured
in years), gender (coded 0= female and 1=male),
and education in terms of credentials (categorized on a
scale of 17where1= less than 12 years of schooling;
2= up to a matriculation certificate; 3= a matriculation
certificate; 4= vocational studies; 5= undergraduate
degree and 6= graduate degree; 7= doctoral degree).
We also used the variable origin (coded 0= native-born
and 1= immigrant).
In order to determine risk-taking propensity we used a
list of risk factors developed by Nicholson et al. (2005).
The risk factors described in their study were: health risk,
career risk, financial risk, safety risk, social risk, and
recreational risk. A similar list of factors for measuring
risk-taking (risks of driving, financial portfolio, sports
and leisure, career, health, and trusting strangers) was used
also by Dohmen et al. (2005) and Bonin et al. (2006), and
has proven validity. We included all of Nicholson et al.
(2005) factors in our list excluding only recreational risk
because of the marginal nature of this phenomenon.
Consequently, our list of risk factors included: taking
financial risks (casino, card games, high-risk
investments), taking social risks (such as running for
election, speaking to large audiences, public
representation, etc.), taking occupational risks (for
example, quitting a job without an alternative guaranteed
job placement), fast driving, and taking health risks (such
as smoking, drinking alcohol, etc.). Respondents were
asked how often they took each risk. Responses were on
a 5-point Likert scale (from 1=neverto 5= always).
We tested the measure of risk-taking propensity using
confirmatory factor analysis (CFA) (see Results section).
We constructed a list of motives for setting up a
business based on our literature review, and used the
measures of intrinsic and extrinsic motives created by
Heilbrunn (2010). It included the following items:
enjoyment, self-development, to be my own boss, need
for change; unable to find work, dissatisfaction with
former work place, public evaluation, inheritance of a
business. Respondents were asked to rate the extent to
which each of these motives could lead to setting up a
business on a 5-point Likert scale (from 1=not
important at allto 5= very important). The measures
of intrinsic and extrinsic motives were tested by means
of CFA (see Results section).
To measure feasibilityof becoming an entrepreneur, we
decided to use a one-item measure. Conventional practice
of measurement in business research strongly supports
multi-item measures. However, there is a wide range of
studies that advocates using a one-item measure, and even
recommends it as preferable in some situations (Gardner
et al., 1998; Rossiter, 2002; Segal et al., 2005; Bergkvist
and Rossiter, 2007; Fuchs and Diamantopoulos, 2009).
Fuchs and Diamantopoulos (2009) defined eight criteria
that make the use of single-item measurement
acceptable/justifiable. Among them, they included the
constructs concreteness, being extremely complex or
unidimensional, high semantic redundancy, being a
moderator or control variable, low desired precision,
problematic monitoring changes, diverse sample
population, and limited size of a sample. The more criteria
the study meets, the more adequate using a simple-item
scale would be.
Our study met at least four of these criteria. First, the
sample population consisted of two groups, which
differed by their characteristics and origin; therefore, our
sample is diverse. Second, using a multi-item measure of
feasibility would have been extremely complex.
According to Waldinger et al.s (1990) opportunity
structure of entrepreneurship, it relies on the ability to
mobilize diverse kinds of resources (capital, social ties,
governmental support). Different population groups,
particularly immigrants, have different access to these
resources (Kushnirovich, 2009). An attempt to evaluate
Tabl e 1 Characteristics of the sample
Characteristics FSU immigrants N = 189 Israeli-born persons N = 297 Total sample N = 486
Gender (%):
Men 47.3 52.4 50.4
Women 52.7 47.6 49.6
Mean age, years 38.1 31.1 33.9
Education (%):
Less than 12 years of schooling 0.0 1.4 0.9
Up to a matriculation certificate 3.2 8.5 6.4
Matriculation certificate 17.1 38.8 30.1
Vocational studies 22.5 16.4 18.8
Undergraduate degree 27.3 29.9 28.8
Graduate and doctoral degree 29.9 5.0 15.0
Employed (%) 89.2 90.8 90.2
Number of children under 18 years old 0.5 0.6 0.6
Entrepreneurial Perceptions of Immigrants 7
©2017 European Academy of Management
all possible dimensions of feasibility would cover too
wide a range of issues reflecting ability to use diverse
resources, and, therefore, can result in biased evaluation.
Measuring perceived feasibility using a single-item issue
is a vital solution for this problem. Third, in spite of its
reliance on a wide range of diverse resources, the concept
of feasibility is very concrete. Feasibility is the degree to
which an individual feels personally capable of starting a
business (Krueger et al., 2000), which can be easily
evaluated by respondents in general, whereas total
assessment takes into account the entire range of
opportunities. Therefore, we asked respondents a concrete
question how they evaluated the chances that they would
set up their own business. The answers were measured
using a 5-point Likert scale response format (1=no
chance, 2= low chance, 3= medium chance, 4= high
chance, and 5= very high chance). Fourth, the size of the
sample is limited because of the difficulties inherent in
gathering data on immigrants. Language barriers make
this population difficult to survey. These factors support
using a single-item measure for assessment of feasibility
to be an entrepreneur. Moreover, in models predicting
entrepreneurial intentions, self-reported evaluation of the
perceived feasibility of creating ones own business is
frequently measured by a single-item measure (Veciana
et al., 2005; Diaz-Casero et al., 2012), based on a one-
issue question: How confident are you that you can
perform the task?(Segal et al., 2005).
Results
Differences in estimations of the feasibility of becoming an
entrepreneur and risk-taking propensity between FSU
immigrants and Israeli-born persons
We expected that FSU immigrants would have lower risk-
taking propensity than Israeli-born persons (H1a). To test
hypothesis H1a, we used t-tests in order to compare the
extent to which respondents were likely to take a risk
(Table 2). The study revealed that immigrants from the
FSU were less likely to take social risks, occupational
risks, financial risks, and risk of fast driving than Israeli-
born persons. In total, FSU immigrantsrisk-taking
propensity was lower than that of Israeli-born individuals.
Hypothesis H1a was supported.
We also expected that FSU immigrants would have
lower perceived feasibility of becoming entrepreneurs
(H1b) than native Israelis. We found significant
differences in estimations of the feasibility of becoming
an entrepreneur between FSU immigrants and native
Israelis (Table 2). FSU immigrantsfeasibility of
becoming an entrepreneur was significantly lower than
that of Israeli-born individuals (2.17 versus 3.02
correspondingly). About 39.2% of immigrants reported
that there was no chance that they would set up a business,
whereas only about 14.8% reported a high chance.
Among the native Israelis, the situation was the opposite.
About 38.6% of them estimated that there was a high
chance that they would set up a business and only about
15.7% of them reported that there was no chance. Thus,
FSU immigrants were less likely to establish businesses
than native Israelis. Hypothesis H1b was supported.
Relationship between perceived feasibility of becoming an
entrepreneur and risk-taking propensity
Measuring risk-taking propensity, as explained in the
Methodsection, is based on the list of risk factors
developed by Nicholson et al. (2005). When applying
any instrument across groups of different cultures, a key
concern is to make sure that measurement of the construct
is invariant cross-culturally (Cheung and Rensvold, 2002;
Harkness et al., 2003). If measurement invariance is
shown then the respondents across both groups interpret
questions and the underlying latent factor in the same
way (Van de Schoot et al., 2012), otherwise interpretation
and between-group comparison is problematic
(Vandenberg and Lance, 2000). The traditional way to
examine construct validity is to specify the same pattern
of elements in the factor pattern matrix for each group,
and to examine factor loadings to be invariant (equal)
across groups (Vandenberg and Lance, 2000). Multiple-
group CFA is the popular analytic tool of choice for
developing and refining measurement instruments,
assessing construct validity, and evaluating factor
invariance across groups (Myers et al., 2000; Brown,
2006; Davidov et al., 2008; Jackson et al., 2009).
In order to make sure that the construct validity of the
risk measure did not vary as a function of group
membership, we ran multi-group comparison CFA. The
Tabl e 2 Risk-taking propensity of FSU immigrants and Israeli born
persons
Mean (SD) FSU
immigran ts
(N = 189)
Israeli-born
persons
(N=297)
t-test
Total risk-taking
propensity (mean index)
1.95 (0.61) 2.20 (0.72) 3.913****
Components of risk-taking:
Taking financial risk 1.57 (0.84) 1.73 (1.00) 1.878*
Taking social risk 1.76 (1.06) 2.22 (1.15) 4.347****
Taking occupational risk 1.70 (0.91) 1.99 (1.02) 3.129***
Fast driving 2.29 (1.17) 2.71 (1.07) 3.881****
Taking health risk 2.41 (1.35) 2.36 (1.41) NS
Feasibility of becoming
an entrepreneur
2.17 (1.17) 3.02 (1.22) 7.589****
*Sig.<0.10;
** Sig. <0.05;
*** Sig. <0.005;
**** Sig. <0.001
8N. Kushnirovich et al.
©2017 European Academy of Management
CFA assumed for one factor that captured the risk-taking
in different spheres: financial risks, social risks,
occupational, fast driving, and health risks (see Method
section). We drew upon the Van de Schoot et al. (2012)
procedural guidelines for assessing measurement
invariance across groups in studies with a CFA approach.
Accordingly, initially the CFA-model should be fitted for
each group separately to test for configural invariance:
whether the same CFA is valid in each group. Two CFAs
were conducted for Israeli-born individuals (chi-square/
df = 1.673, CFI = 0.975, NFI = 0.943, TLI = 0.951,
RMSEA =0.048) and immigrants (chi-square/df = 1.286,
CFI = 0.960, NFI =0.899, TLI = 0.920, RMSEA
=0.039) separately, and fit indices for both groups were
found acceptable. Next, we tested for measurement
invariance, see Table 3 for the fit indices which were
found acceptable, meaning that two groups have the same
risk factor structure.
1
In accord with our second hypothesis, we expected that
risk-taking propensity would be positively related to
estimations of the feasibility of becoming an entrepreneur.
In order to examine this relationship we conducted
regression analysis. Perceived feasibility of becoming an
entrepreneur was the dependent variable, and risk-taking
propensity was the independent variable.
2
As mentioned
above, FSU immigrants had lower perceived feasibility
of becoming entrepreneurs and reported lower risk-taking
propensity than native Israelis. Therefore, we ran a
regression pooled across groups, and assessed immigrants
vs. native-born persons as a moderator of relationship
between risk-taking propensity and estimated feasibility
of becoming an entrepreneur (model 1 in Table 4). The
analysis revealed that risk-taking propensity is positively
related to estimation of the feasibility of becoming an
entrepreneur even after controlling for origin (being an
immigrant); therefore, Hypothesis 2 was supported.
In order to examine whether the marginal effect of risk-
taking propensity on the feasibility of becoming an
entrepreneur is stronger for one of the groups, we
conducted a multiplicative interaction regression model
(model 2 in Table 4). In model 2, the effects of risk-taking
propensity and origin (being an immigrant) remain
statistically significant.
However, we did not find a significant effect of their
interaction. Therefore, the marginal effects (slopes) of
risk-taking propensity on estimated feasibility of
becoming an entrepreneur are rather similar for
immigrants and native-born persons. For native-born
individuals, the slope (marginal effect) was 0.413
(0.098), p= 0.000. For immigrants, the slope was only
slightly but not significantly higher 0.458 (0.141),
p= 0.001.
3
This means that FSU immigrantsmarginal
feasibility of becoming entrepreneurs is similar to that of
Israeli-born individuals. Thus, immigrants are neither
more nor less entrepreneurial related to risk-taking than
the native-born population, when for both groups, the
marginal effects were positive.
Since the slopes of regression lines for immigrants and
native-born persons are similar, the intercepts should be
compared. Above, we found differences between the two
populations in their estimations of the feasibility of
Tabl e 3 Fit measures for a multi-group confirmatory factor analysis, constraining invariance across immigrant and native-born groups
a
Model type Chi-square df CFI NFI TLI RMSEA RMR AIC BCC
Risk models:
Unconstrained 14.798 10 0.972 0.923 0.944 0.031 0.045 54.798 55.880
Measurement weights 17.958 14 0.977 0.906 0.967 0.024 0.056 49.958 50.824
Structural covariances 23.456 15 0.951 0.878 0.934 0.034 0.085 53.456 54.268
Measurement residuals 31.705 20 0.932 0.835 0.932 0.035 0.097 51.705 52.246
Motives Models:
Unconstrained 76.808 39 0.953 0.910 0.932 0.045 0.072 142.808 145.518
Measurement weights 83.491 45 0.952 0.903 0.940 0.042 0.088 137.491 139.708
Structural weights
b
84.811 46 0.952 0.901 0.941 0.042 0.095 136.811 138.946
Structural covariances 85.139 47 0.952 0.901 0.943 0.041 0.100 135.139 137.191
Measurement residuals 103.394 55 0.940 0.879 0.938 0.043 0.105 137.394 138.790
a
df = the number of degrees of freedom CFI = the comparative fit index; NFI = the Bentler-Bonett normed fit index; TLI = the Tucker-Lewis index; RMSEA
= the root mean square error of approximation; RMR = the root mean square residual; AIC = the Akaike information criterion; BCC = the Browne-Cudeck
criterion; ECVI = the expected cross-validation index.
b
Since we had second order factor structure of motives (extrinsic and intrinsic motives), we also tested structural weights.
1
For native-born Israelisthe loading of the componentswas as follows: financial
risks 0.680, taking social risks 0.617, taking occupational risks 0.644, fast
driving 0.603, and taking health risks 0.605. For FSUimmigrants, the results
were as following: financial risks (loading 0.666), taking social risks (0.638),
taking occupational risks (0.636), fast driving (0.617), and taking health risks
(0.509).
2
The independent variable, risk-taking propensity, is never equal to 0,so, there
is a reason for centering. After centering the mean = 0, and the intercept became
meaningful.
3
When the model is Y = b0 + b1X + b2Z + b3XZ + ε,whereXisrisk-taking
propensity, and Z is origin (being an immigrant), the marginal effect for
immigrants is calculated as a sum of marginal effects of risk-taking propensity
(marginal effect for native-born persons b1) and marginal effect of interaction
(b3) (Brambor et al., 2006; Cohen et al., 2003): 0.413 + 0.045 = 0.458. We
ran additional tests examining the differences in simple slopes between the
two groups. The gap between the simple slopes is (bIMM-bISR) = 0.045,
t=0.2998,p=0.795.
Entrepreneurial Perceptions of Immigrants 9
©2017 European Academy of Management
becoming an entrepreneur. Hence, their intercepts should
be significantly different. For the native-born population,
the intercept is 3.009, and for immigrants it is significantly
lower 2.238.
4
Generally, when one analyzes only two
population groups, the T value for the dummy variable
conveys whether the intercept for that group differs
significantly from the intercept for the reference group
(Williams, 2013). According to Wuensch (2014), when
comparing intercepts for only two population groups, we
can regard the T value for the dummy variable in the
interaction model.
5
Thus, the test of the dummy variable
is the test of intercepts. Our model shows that origin (being
an immigrant) has a significant negative effect on the
estimated feasibility of becoming an entrepreneur, that
can be interpreted as a significant difference in intercepts
between the regression lines of immigrants and
native-born persons (higher for native-born persons,
t=6.814, p<0.000). Therefore, for the same level of
risk-taking propensity, the immigrantsestimate of their
feasibility of becoming an entrepreneur was lower than
that of native-born persons. Figure 1 shows the predicted
values of estimated feasibility of becoming an
entrepreneur related to the risk-taking propensity for each
of the two groups.
In sum, regression analysis revealed that the slopes of
regression lines of immigrants and native-born persons
do not differ significantly, but their intercepts do differ
with the intercept of the native-born population being
higher than that of the immigrants. This means that
immigrants are entrepreneurial to the same extent as
native-born persons; however, as can be seen in Figure 1,
the immigrantsregression line is placed lower than that
of Israeli-born persons. Namely, FSU immigrants
estimated the feasibility of becoming an entrepreneur for
each level of risk-taking lower than the native-born
individuals.
Factors predicting perceived feasibility of becoming an
entrepreneur
The third hypothesis posited that extrinsic and intrinsic
motives for setting up a business, risk-taking propensity
4
The b0 value for the intercept in the interaction model is an intercept of the
regression line for the reference group (3.009 for native-born persons). The
intercept of the regression line for the comparison group (immigrants) is the
intercept of native-born individuals plus the coefficient for the dummy variable
(Brambor et al., 2006; Cohen et al., 2003): 3.009 + (0.771) = 2.238.
5
The explanation for this is that the t for the grouping variable in the interaction
model is identical to the t that could be obtained from the partial F comparing
models with interaction and without it (Wuensch, 2014)
Tabl e 4 Results of linear regressions examining (dependent variable: perceived feasibility of becoming an entrepreneur)
Model 1 Model 2 Model 3 Model 4
B tBtBtBt
Education – –––0.043 (0.047) 0.913 0.044 (0.047) 0.932
Age – –––0.044
***
(0.006) 7.447 0.044
***
(0.006) 7.454
Gender (1=male) – –––0.393
***
(0.113) 3.474 0.395
***
(0.113) 3.486
Extrinsic motives – –––0.199
***
(0.057) 3.474 0.198
***
(0.057) 3.453
Intrinsic motives – –––0.179
***
(0.033) 5.332 0.179
***
(0.034) 5.337
Risk-taking
propensity
0.427
***
(0.080) 5.311 0.413
***
(0.098) 4.209 0.273
**
(0.087) 3.130 0.302
**
(0.104) 2.897
Origin:
(1= immigrant)
0.774
***
(0.112) 6.885 0.771
***
(0.113) 6.814 0.481
***
(0.118) 4.072 0.485
***
(0.119) 4.093
Origin × ris k-taking
propensity
––0.045 (0.172) 0.259 ––0.085 (0.166) 0.513
Constant 3.008
***
(0.071) 42.488 3.009
***
(0.071) 42.335 3.718
***
(0.285) 13.068 3.716
***
(0.285) 13.045
R-Square 0.162
***
0.160
***
0.300
***
0.299
***
*Sig.<0.05;
** Sig. <0.005;
*** Sig. <0.001.
Figure 1 Predicted values of estimated feasibility of being an entrepreneur
related to the risk-taking propensity for immigrants and nativeborn
persons, separately
10 N. Kushnirovich et al.
©2017 European Academy of Management
and demographic characteristics would significantly relate to
the perceived feasibility of becoming an entrepreneur. In
order to examine this hypothesis, we added extrinsic and
intrinsic motives and a set of demographic characteristics
(age, gender, education) to the independent variables.
In order to distinguish groups of motives leading to
setting up a business, we first used exploratory factor
analysis (EFA), and then, in order to examine
measurement invariance of received factors across groups,
we used CFA. Exploratory factor analysis (extraction
method: principal components analysis; rotation method:
Varimax with Kaiser normalization) determined two
factors of motives: the first factor consisted of issues
expressing intrinsic motives: enjoyment (loading 0.782),
self-development (0.690), being my own boss (0.641),
need for change (0.616); and the second factor consisted
of issues expressing extrinsic motives: unable to find work
(0.750), dissatisfaction with former work place (0.661),
public evaluation (0.563), inheritance of a business
(0.532).Total variance extracted by the two factors was
44.4% (eigenvalue >1.0).
In order to check measurement invariance in motives
between two groups, we ran second order multi-group
comparison CFA. The factor of motivation included two
sub-factors: extrinsic motives and intrinsic motives.
Initially, two CFAs were conducted for Israeli-born
individuals (Chi-square/df = 2.991; CFI = 0.930,
NFI = 0.901, TLI = 0.898, RMSEA =0.082) and
immigrants (Chi-square/df = 1.016; CFI = 0.999,
NFI = 0.932, TLI = 0.998, RMSEA =0.009) separately,
and fit indices for both groups were found acceptable.
Next, we tested for measurement invariance, see Table 3
for the fit indices which also were found acceptable,
meaning that the two groups have the same structure of
motives. Thus, we received two factor variables: intrinsic
motives and extrinsic motives.
The results of linear regression with and without
interaction are presented in Table 4 (models 3 and 4
correspondingly). While conducting regression analysis,
we also performed multicollinearity diagnostics of the
independent variables using variance inflation factors
(VIF). As a rule, if any of the VIFs is greater than 5
(greater than 2.5 to be very conservative) there is a
multicollinearity problem. In our analysis, VIFs did not
exceed 1.802. Hence, there are no multicollinearity
problems in our regression models. The regression models
for both FSU immigrants and Israeli-born persons were
significant at 0.000. We can conclude that there was an
association between the dependent and independent
variables. Therefore, Hypothesis 3 was supported.
Table 4 shows that the perceived feasibility of becoming
an entrepreneur is significantly associated with all
explanatory variables except for education. Aging persons
were less likely to be entrepreneurs than younger
individuals. Women had lower estimations of feasibility
for becoming entrepreneurs than men. Individuals who
evaluated intrinsic motives as more important for setting
up a business were more likely to be entrepreneurs; and
those for whom extrinsic motives were more important,
were less likely to do so. The positive relationship between
risk-taking propensity and estimated feasibility for
becomingan entrepreneur remained statistically significant
even after controlling for age, gender, education, and
intrinsic and extrinsic motives for setting up a business.
The effect of origin (being an immigrant) was also similar
to that obtained in models 1 and 2, and the effect of
interaction remained non-significant. Thus, even after
controlling for the main demographic variables and
motives for setting up a business, the results are similar.
Conclusions
This paper developed the application of the risk
homeostasis theory, pioneered by Wilde. The theory was
adapted to migration and entrepreneurship research in
order to further the understanding regarding intentions of
immigrants versus native populations for becoming
entrepreneurs. Following Krueger (1993), Krueger et al.
(2000), perceived feasibility is the most important
indicator explaining entrepreneurial intentions. In the
current study, perceived feasibility to be an entrepreneur
expressed an assessment of opportunity to act, and
risk-taking propensity derived from an assessment of
opportunity to succeed. Based on the theory of extrinsic
and intrinsic entrepreneurial motivation and Nicholsons
definition of risk-taking, we delineated the determinants
that contribute to estimations of perceived feasibility of
becoming an entrepreneur.
The study revealed that immigrants showed less
perceived feasibility to set up a business than the
native-born population, and their risk-taking propensity
was lower than that of Israeli-born persons. As expected,
we found a positive relationship between risk-taking and
perceived feasibility of becoming an entrepreneur for
both groups of respondents. The marginal perceived
feasibility of becoming an entrepreneur respective to
risk-taking was similar for immigrants and native-born
individuals; namely, immigrants were neither more nor
less entrepreneurial than the native-born population.
However, the regression line of immigrants was
significantly lower than that of the native-born
population. This means that on any risk-taking level,
immigrantsfeasibility for becoming an entrepreneur
was lower than that of their native-born counterparts.
Keeping in mind that the risk-taking propensity of
immigrants was also lower, we can explain the low
overall estimated feasibility of immigrants for becoming
entrepreneurs considering the risks they had experienced
during immigration. Immigrants, who took some risks in
Entrepreneurial Perceptions of Immigrants 11
©2017 European Academy of Management
the past, were no longer tolerant of further additional
risks including the risk of setting up a business. This
decreased their risk-taking propensity and, therefore,
their perceived feasibility for setting up businesses. In
other words, the circumstantial status of being an
immigrant reduced their perception of the opportunity
to become an entrepreneur by being able to secure the
necessary resources for business start-up.
The perceived feasibility of becoming an entrepreneur
was significantly associated with age, gender, risk-taking,
and perceptions of motives for setting up a business.
Women were less likely than men to be entrepreneurs.
Aging individuals were less likely than younger persons
to be entrepreneurs. This can be explained by the fact that
elderly individuals and women encounter more barriers
for setting up a business, and therefore have lower
estimations of feasibility for becoming entrepreneurs.
Those who evaluated intrinsic motives as more important
for setting up a business, were more likely to be
entrepreneurs, and those who evaluated extrinsic motives
as more important, were less likely to do so. This finding
is consistent with Kruegers theory according to which
perceived feasibility to set up a business is positively
associated with desirability to be an entrepreneur (that
can be reflected in strong intrinsic motives). Along with
these factors, risk-taking propensity remains the salient
factor that predicted estimations of feasibility for
becoming an entrepreneur.
Thus, our study revealed that risk-taking is an
important component of entrepreneurial orientation.
FSU immigrants are no less entrepreneurial than native-
born individuals, but the high level of apparent
immigration-related risks that they had experienced in
the past precluded the likelihood that they would set up
their own businesses. Our finding is consistent with the
risk homeostasis theory, and can explain why immigrants
are less likely to be entrepreneurs despite their high
initial personal inclinations to be entrepreneurs derived
from their self-selection. The high level of risks that they
had experienced in the past, particularly the risks of
immigration, led them to be less likely to take more
risks, thus decreasing their risk-taking propensity and,
therefore, their perceived feasibility of establishing
businesses. Risk aversion can also depend on the
immigrant experience, when successful experience
would make immigrants less risk-averse. FSU
immigrants can be perceived as a successfully integrated
group in terms of labor market participation and
involvement in the social welfare system, demonstrating
a high ability to copy with difficulties (Smooha, 2008;
Heilbrunn et al., 2010; Semyonov et al., 2010;
Kushnirovich and Heilbrunn, 2013). However, the
current study does not control for diversity of immigrant
experiences, which should be the focus of further studies
in this field.
This study extends the research regarding both
entrepreneurship and migration, and furthers the
understanding regarding what contributes to immigrants
decisions for establishing businesses. Our study also has
some practical implications. Immigrant entrepreneurship
contributes to the development of local economies by
accelerating productivity growth, stimulating innovations,
development of technology and competition.
Understanding the determinants of immigrantsperceived
feasibility of becoming an entrepreneur can contribute to
the development of government programs for involving
immigrants in entrepreneurial endeavors that may result
in economic development. Moreover, in countries with a
developed structure of government support, encouraging
immigrantsintegration through entrepreneurship,
understating immigrantsintentions and perceptions as
to setting up a business can be a central factor for
facilitating immigrant entrepreneurship.
Study limitations
The main limitation of this study was the comparison of
the native Israeli population with only one immigrant
group. This restriction did not allow us to relate to the
effect of cultural differences between other immigrant
groups on the perceived feasibility of becoming an
entrepreneur. Nevertheless, as was justified in the Method
section, in this study cultural differences would have had
only a negligible effect. The current study does not
explicitly examine the impact of the immigrant experience
on risk aversion. In future studies, the claim that
immigrants who took risks in the past are no more tolerant
of further risks associated with venturing can be
corroborated qualitatively. Some interviews could help
to confirm it. Future studies are needed in this field. While
the present study focuses on the feasibility aspect of
Kruegers model, future studies should examine
desirability in order to understand intentions of new
venture creation.
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... Personal business competencies and ways of applying such competencies are considered as key factors, which can ease business evolvement to some extent (Sui et al. 2015;Kushnirovich et al. 2018). Entrepreneurial motivation among immigrants is high; however, the successful pursuit of entrepreneurship is likely to be low among immigrant entrepreneurs in general (Kushnirovich et al. 2018). ...
... Personal business competencies and ways of applying such competencies are considered as key factors, which can ease business evolvement to some extent (Sui et al. 2015;Kushnirovich et al. 2018). Entrepreneurial motivation among immigrants is high; however, the successful pursuit of entrepreneurship is likely to be low among immigrant entrepreneurs in general (Kushnirovich et al. 2018). ...
Article
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A recent OECD report recognises that the limited scope for immigrant women to integrate into mainstream Finnish society has kept them out of the labour market. In fact, a woman with migrant background faces several challenges to get access to the Finnish labour force and this has prompted them to become self-employed in small business, particularly in the northern part of Finland. However, establishing a small business and its operation induces diverse problems in this remote, mainly rural region. An inclusive entrepreneurship policy may support improving their condition in entrepreneurship. The study explores the main factors hindering the financial and socio-cultural inclusion of women immigrants in Northern Finland. A thematic analysis of cultural and economic inclusivity, based on descriptive phenomenology, helps understand and reconstruct a policy of inclusive societies in the context of rural entrepreneurship.
... Although role models can play a vital part in initiating a new venture (Carter et al., 2003), Cont ın-Pilart and Larraza- Kintana (2015) found that nascent immigrant entrepreneurs are less likely to be influenced in their entrepreneurial activity by past and present entrepreneurs in the region where they live compared with the native population as they cannot relate to local role models. Kushnirovich et al. (2018) linked the perception of entrepreneurial risk-taking propensity (in relation to the perceived feasibility of starting a new venture) to risks related to immigration-related experiences and changed social environment. Unger et al. (2011) showed that previous entrepreneurial experiences rather than formal education were positively linked to successful start-ups. ...
... The participants' observed personal characteristics (such as self-confidence, belief in their own abilities, their drive to "do something" and risk-taking) interrelated with their crosscultural and nascent entrepreneurial experiences in both positive and negative ways (Kim, 2001;Ram et al., 2017;Kushnirovich et al., 2018). Female participants verbalized their lack of self-confidence and questioned their abilities more than the male participants. ...
Purpose All entrepreneurs face challenges during their venture start-up process, but immigrant entrepreneurs face additional and distinctive challenges due to their contextual newness. This paper focuses on understanding the intertwined journeys of nascent entrepreneurship and cross-cultural adaptation of immigrants in a small Western European country where immigrant entrepreneurship is still a relatively new phenomenon. Design/methodology/approach The induction-driven, 18-month longitudinal empirical inquiry focused on six early-stage nascent entrepreneurs. Qualitative methods included participant observation during an enterprise program, qualitative interviews and ongoing informal communication. Findings The data uncovered the interplay between the nascent immigrant entrepreneurship and cross-cultural adaptation. This led to the development of a novel conceptual framework which highlights how the cross-cultural adaptation domain links with the process of recognition, evaluation and exploitation of entrepreneurial opportunities by immigrant entrepreneurs. While varying temporarily and contextually, cross-cultural adaptation was found to create both enabling and constraining tensions within the nascent entrepreneurial experiences of immigrants. Research limitations/implications It is recognized that undertaking just six cases may present a significant limitation of the research, but a close examination of even one individual's lived experience can yield valuable insights. It is hoped that future work will test the highlighted research propositions and other findings in different empirical contexts, and so add to the emerging conceptual framework on nascent immigrant entrepreneurship within the context of cross-cultural adaptation. Originality/value No previous qualitative studies have been undertaken seeking to understand how cross-cultural adaptation interacts with the early stages of nascent immigrant entrepreneurial activity. By integrating new venture creation and cross-cultural adaptation theories, this research contributes to the conceptualisation of early stages of nascent entrepreneurial activities of immigrants in a new host environment. The implications of the research are also relevant to enterprise support bodies, policymakers and practitioners who support immigrant entrepreneurship.
... Previous studies showed that an important difference between migrant and native entrepreneurs relates to attitudes toward risk (see, e.g. Batista and Umblijs, 2014;Kushnirovich et al., 2018). This difference was also identified by the practitioners, who suggested that, compared to Austrian entrepreneurs, migrants are more prepared to take risks and are often faster to penetrate the market. ...
Article
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Purpose The dynamics of modern life lead to societal changes that affect innovation systems. Entrepreneurship is an important driver for fostering adaptive capacities of innovation systems in such uncertain and complex environments. This study aims to gain a detailed understanding of how (innovative) entrepreneurship can promote innovation systems, leading to more sustainable societies. A particular focus is placed on migrant entrepreneurship in the digital economy, as a concrete implication of innovative entrepreneurship, and its role within the Austrian innovation system. Design/methodology/approach In order to develop a shared system understanding from a scientific and practical perspective, transdisciplinary multistage system modeling was applied. The transdisciplinary discourse involved 14 experts, and several system models were iteratively co-created during the course of the research. Findings The main result demonstrates the interrelationship between the innovation system and migrant entrepreneurship in the digital economy, which includes six core reinforcing loops: (1) the mindsets of entrepreneurs, (2) the role of international collaboration, (3) the role of entrepreneurial education, the financial sphere in regard to (4) government and (5) private funding, as well as (6) the impact of formal procedures. Originality/value The authors present and discuss the relational dynamics of this complex phenomenon as well as the applied transdisciplinary approach, with the aim of identifying a potential way to improve the sustainable impact of (migrant) entrepreneurship considering the case of the Austrian innovation system.
... Space "may not have a causal power independent of other social agents and processes" (Zhou 1998, p. 532 in Wang 2013, p. 101), but it interacts for instance through the perception of business opportunities, as well as resources of capital labor and knowledge (Wang 2013). On one hand, dimensions of ethnic diversity determine the access to self-employment and the input and output resources of refugee entrepreneurship, i. e. the motives of immigration or human capital acquired through pre-immigration work experiences or education (Dabić et al. 2020;Kushnirovich et al. 2018). On the other, space accounts for population density and local resource and market accessibility. ...
Article
Full-text available
In the past decade refugee entrepreneurship has received unprecedented political and public attention worldwide and especially in Germany. Due to the circumstances of the forced migration and asylum procedure, refugee entrepreneurs are socially disembedded in both: the co-ethnic community and in the local community, in comparison to other immigrant entrepreneurs or native entrepreneurs. Since asylum seekers are allocated to their residence independent of their will, it is crucial to assess how their socio-spatial embeddedness determines refugee entrepreneurial propensity. We depart from the abstract concept of mixed embeddedness and concretize spatial embeddedness in urban, semi-urban and rural environments. By building on the knowledge spillover theory of entrepreneurship (KSTE), we include embeddedness in cultural diversity, in our research model, too. The econometric analyses of the German Microcensus suggest, first, that refugees are especially prone to entrepreneurship. Second, intercultural embeddedness has the strongest significant positive correlation with refugee entrepreneurial propensity, compared to other immigrants and native-born. However, when including interaction effects of cultural diversity in different spaces, the positive relationship of ethnic diversity and refugee entrepreneurship holds only true in semi-urban spaces. This provides clues that refugee entrepreneurs in rural or urban environments access resources and opportunities through alternative social capital.
... Past studies have portrayed immigrants as being more willing to take risks than those who have not migrated, since their move to another country has already carried considerable risks; other, more recent contributions have found that, despite high entrepreneurial motivation among immigrants, venture implementation has had low perceived feasibility (Kushnirovich et al., 2018). In this sense, some studies see that immigrants face other barriers than natives throughout their entrepreneurial venture (Kubberød & Norstrøm, 2018), which should be further investigated as to disentangle the mechanisms through which this "perceived feasibility" is on the part of the immigrants themselves or a reflection of their host society, or a combination of the two. ...
Chapter
Traditionally, immigrants have been found to demonstrate higher entrepreneurial drive than non-immigrant populations, which has spurred an increase in international scholarly attention to this theme. Studies on immigrant entrepreneurship have tackled a variety of related topics, such as the uncovering of entrepreneurial intentions, opportunity recognition, and the role of diaspora networks. Cultural entrepreneurship has emerged along these lines, centering on the role of culture and heritage in entrepreneurial ventures. Concomitantly, interest has grown in investigating cultural entrepreneurship from the prism of culture-making—deploying culture towards making culture, and thus altering frames of reference. But despite the boom in research on these matters internationally, as well as in the presence of immigrant entrepreneurs in Norway, few scholars have offered contributions on immigrant entrepreneurship in the country. Moreover, to the best of this author’s knowledge, research devoted to the interconnectedness between immigrant entrepreneurship and cultural entrepreneurship is scarce. Thus, the present chapter offers critical reflections on this angle and highlights fruitful pathways for future research. This chapter tackles the topic of cultural entrepreneurship by advancing knowledge on the role cultural entrepreneurship may play in encouraging greater equitability and mutual understanding among communities in multicultural societies.
... Les entrepreneurs défavorisés incorporent un large éventail d'individus et de groupes qui varient en fonction de leurs attributs et de leurs circonstances socio-démographiques (Kushnirovich et al., 2017 ;Miller & Breton-Miller, 2017). Ils sont catégorisés selon les défis rencontrés à savoir les défis physiques, émotionnels, cognitifs, socio-culturels, économiques (Miller & Breton-Miller, 2017). ...
Thesis
Full-text available
Dans le cadre de cette recherche doctorale, nous nous intéressons exclusivement aux moyens et aux partenaires des entrepreneurs en situation de handicap social, moteur ou sensoriel en s’appuyant sur la théorie de l’effectuation. Cette thèse se structure en deux parties respectivement de quatre et de six chapitres. La partie I pose le cadre de la recherche : présentation de la nouvelle recherche sur les entrepreneurs en situation de handicap moteur ou sensoriel, cadrage théorique, méthodologie de recherche et positionnement et problématique. La partie II présente six travaux de recherche. Trois travaux de recherche portent sur les jeunes sans domicile successivement en France, aux Etats-Unis et en comparaison par le biais d’une histoire de vie d’un jeune rêveur, l’entrepreneuriat informel et la formation. Trois travaux de recherche considèrent les entrepreneurs en situation de handicap moteur ou sensoriel par le biais de leurs caractéristiques, de leur écosystème et du cas particulier de l’intégration professionnelle de deux masseurs -kinésithérapeutes. En conclusion, nous discutons des résultats d’un point de vue global, mobilisons l’approche critique en entrepreneuriat, proposons des contributions générales et présentons des limites de recherche. Cette recherche présente plusieurs limites. Premièrement, elle s’intéresse aux expériences des entrepreneurs en situation de handicap social, moteur ou sensoriel basé en fonction uniquement de leurs représentations de ces expériences. Les données collectées reposent sur une histoire rétrospective et racontée par les informants eux-mêmes. Les discours des informants et leurs actes ne peuvent être mis en comparaison, excepté durant l’enquête de terrain. Par ailleurs, les personnes qui accompagnent les informants d’un point de vue personnel, associatif, professionnel ne sont pas interrogées. Les regards ne sont ainsi pas croisés, discutés. Un seul angle d’analyse est privilégié, ce qui fabrique des zones d’ombre.
... Naud e et al. (2017, p. 3) find higher self-employment rates of immigrants in just 13 of the 25 OECD countries. Lower shares of immigrant entrepreneurship might stem from a lack of necessary skills or knowledge about consumer preferences, low familiarity with regulations and institutional requirements, or limited perceived feasibility (Kushnirovich et al., 2018). Despite such mixed evidence, a general research consensus implies that immigrants are more likely to be entrepreneurially active than are natives (Desiderio, 2014). ...
Article
Full-text available
Purpose This study investigates the differential likelihood of being an entrepreneur among immigrants to and natives of a country. Using a mixed embeddedness perspective, the authors outline how economic, sociocultural, and institutional embeddedness influence the likelihood of entrepreneurial activity exhibited by immigrant and native residents. Design/methodology/approach The tests of the hypotheses rely on a multilevel cross-country research design that uses secondary data from different sources. Findings Compared with their native counterparts, immigrants are more likely to start and run their own businesses, and an array of environmental factors influences this likelihood. The level of economic development and equality laws increase it; the abundance of market opportunities in an economy, entrepreneurship culture and cultural collectivism diminish it. Practical implications The findings provide policy makers and stakeholders with valuable insights into pertinent environmental factors that determine the differential propensities of immigrant and native residents to become entrepreneurs. Originality/value This study provides an expanded understanding of the connection between being an immigrant and entrepreneurial activity, by explicating the influences of country-level conditions.
... As mentioned in the previous section, disadvantaged entrepreneurs incorporate a range of individuals that vary depending on their socio-demographic characteristics (Marlow and Patton, 2005), ethnic minorities (Carter et al., 2015), immigrants (Nonna et al., 2017) etc. While this study does not refer to any specific group of individuals in its conceptualizing, we recognize and discuss theories that have been used to explain entrepreneurship in several of these groups. ...
Article
Full-text available
In this conceptual article, we suggest that disadvantaged entrepreneurship is a contextualized phenomenon. Combining individual-level (micro-level) disadvantage theory of entrepreneurship with societal-level (macro-level) theory of diversity and inclusion and culturally endorsed implicit leadership theory, we discuss the influence of societal level social inclusion values and culturally endorsed collective leadership styles (Collective CLT) on disadvantaged individual’s participation in entrepreneurship. We also propose interaction effects between these two antecedents of disadvantaged entrepreneurship. Societal level collective CLT is conceptualized as a shared cultural leadership style that (1) fosters sharing of leadership roles (2) encourages shared decision making, (3) promotes working in teams towards achieving shared goal through common actions, and (4) establishes high performance standards. Societal-level inclusion value would foster disadvantaged individuals’ participation in entrepreneurship through enhancing the effectiveness of collective CLT. A brief description on operationalization and empirical treatment of the two antecedents will also be presented. We also discuss the implications of this study for theory as well as for practice.
Article
The purpose of this study is to investigate the emergence of social entrepreneurial intentions (SEIs) of youngsters at the base of the pyramid (BoP). A small but growing literature is emerging at the intersection of social entrepreneurship (SE) and BoP perspectives. However, little is known about the emergence of SEI in this context. Drawing on a qualitative approach, our findings highlight perceived self-efficacy, self-fulfilment and reciprocity as important drivers of SEIs of youngsters at the BoP. At a practical level, our study also highlights how social support could aid to develop individuals’ perceptions of their own capabilities and help them to project themselves as social entrepreneurs.
Article
Full-text available
Entrepreneurship is the creation of organizations. What differentiates entrepreneurs from non-entrepreneurs is that entrepreneurs create organizations, while non-entrepreneurs do not. In behavioral approaches to the study of entrepreneurship an entrepreneur is seen as a set of activities involved in organization creation, while in trait approaches an entrepreneur is a set of personality traits and characteristics. This paper argues that trait approaches have been unfruitful and that behavioral approaches will be a more productive perspective for future research in entrepreneurship.
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Leading researchers use their outstanding expertise to investigate various aspects in the context of innovation and entrepreneurship such as growth, knowledge production and spillovers, technology transfer, the organization of the firm, industrial policy, financing, small firms and start-ups, and entrepreneurship education as well as the characteristics of the entrepreneur. © David B. Audretsch, Oliver Falck, Stephan Heblich and Adam Lederer 2011. All rights reserved.
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This Handbook summarizes the state of thinking and presents new evidence on various links between international migration and economic development, with particular reference to lower-income countries. The connections between trade, aid and migration are critically examined through global case studies.
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Intrinsic and extrinsic types of motivation have been widely studied, and the distinction between them has shed important light on both developmental and educational practices. In this review we revisit the classic definitions of intrinsic and extrinsic motivation in light of contemporary research and theory. Intrinsic motivation remains an important construct, reflecting the natural human propensity to learn and assimilate. However, extrinsic motivation is argued to vary considerably in its relative autonomy and thus can either reflect external control or true self-regulation. The relations of both classes of motives to basic human needs for autonomy, competence and relatedness are discussed.
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The primary purpose of this article is to clarify the nature of the entrepreneurial orientation (EO) construct and to propose a contingency framework for investigating the relationship between EO and firm performance. We first explore and refine the dimensions of EO and discuss the usefulness of viewing a firm's EO as a multidimensional construct. Then, drawing on examples from the EO-related contingencies literature, we suggest alternative models (moderating effects, mediating effects, independent effects, interaction effects) for testing the EO-performance relationship.