The Annals of Regional Science

, Volume 46, Issue 3, pp 661–689 | Cite as

Impact of urban conditions on firm performance of migrant entrepreneurs: a comparative Dutch–US study

Open Access
Special Issue Paper

Abstract

Recent studies on ethnic entrepreneurship have pointed at an increasing share of migrants in urban small- and medium-sized entrepreneurial businesses. These migrant activities are crucial to the urban economy in many countries, as they employ a significant part of the workforce. The main objective of our study is to identify success conditions of ethnic entrepreneurship by using concepts from social capital and human capital from the literature on empirical factors that are responsible for successful ethnic entrepreneurship. The empirical part of the paper is based on a survey questionnaire among migrant entrepreneurs in the city of Amsterdam in the Netherlands and in Fairfax, County in the state of Virginia in the US. We present an overview of cultural, ethno-psychological and motivational aspects that contribute to the understanding of similarities and differences between ethnic entrepreneurs in both locations. The analysis is structured around several dimensions of social and human capital including personal and business characteristics, and network participation for improving business performance. The findings of the two studies are compared to explore a possible correspondence in business performance patterns. The research tool used to assess performance is Data Envelopment Analysis (DEA), a technique for comparative efficiency analysis in various types of corporate organizations. Finally, concluding remarks are presented and possible extensions of the analysis are suggested.

JEL Classification

L26 R11 

Notes

Open Access

This article is distributed under the terms of the Creative Commons Attribution Noncommercial License which permits any noncommercial use, distribution, and reproduction in any medium, provided the original author(s) and source are credited.

References

  1. Acs, ZJ, Armington, C (eds) (2006) Entrepreneurship, geography, and American economic growth. Cambridge University Press, CambridgeGoogle Scholar
  2. Acs, ZJ, Audretsch, DB (eds) (1993) Small firms and entrepreneurship; an east-west perspective. Cambridge University Press, CambridgeGoogle Scholar
  3. Adler PS, Kwon SW (2002) Social capital: prospects for a new concept. Acad Manag Rev 27(1): 17–40CrossRefGoogle Scholar
  4. Aldrich HE, Zimmer C (1986) Entrepreneurship through social networks. In: Sexton DL, Wilson RW (eds) The art and science of entrepreneurship. Ballinger, Cambridge, pp 154–167Google Scholar
  5. Anderson AR, Miller CJ (2003) Class matters: human and social capital in the entrepreneurial process. J Socio Econ 32(1): 17–36CrossRefGoogle Scholar
  6. Aronson D (1997) Research perspectives on migration. A joint project of the International Migration Policy Program of the Carnegie Endowment for International Peace and the Urban Institute 1(2)Google Scholar
  7. Audretsch DB, Thurik AR (2001) What’s new about the new economy? Sources of growth in the managed and entrepreneurial economies. Ind Corp Change 1(10): 267–315CrossRefGoogle Scholar
  8. Banker RD, Charnes A, Cooper WW (1984) Some models for estimating technical and scale inefficiencies in data envelopment analysis. Manag Sci 30: 1078–1092CrossRefGoogle Scholar
  9. Basu A (1998) An exploration of entrepreneurial activity among Asian small businesses in Britain. Small Bus Econ 10: 313–326CrossRefGoogle Scholar
  10. Bates T (1993) Assessment of state and local government minority business development programs. US Department of Commerce, Washington, DCGoogle Scholar
  11. Bates T (1994a) An analysis of Korean-immigrant-owned-small-business start-ups with comparisons to African-American-and nonminority-owned firms. Urban Aff Q 30(2)Google Scholar
  12. Bates T (1994b) Social resources generated by group support networks may not be beneficial to Asian immigrant-owned small businesses. Soc Forces 72(3): 671–689CrossRefGoogle Scholar
  13. Bates T (1999) Race, self-employment, and upward mobility: an illusive American dream; response to John Sibley Butler’s review essay. Small Business Economics, vol 12, pp 189–190. SpringerGoogle Scholar
  14. Baum RJ, Locke EA, Smith KG (2001) A multidimentional model of venture growth. Acad Manag J 44(2): 292–303CrossRefGoogle Scholar
  15. Baycan-Levent T, Masurel E, Nijkamp P (2003) Diversity in entrepreneurship: ethnic and female roles in urban economic life. Int J Soc Econ 30(11): 1131–1161CrossRefGoogle Scholar
  16. Becker GS (1975) Human capital—a theoretical and empirical analysis with special reference to education. The Press of Chicago University, ChicagoGoogle Scholar
  17. Birley S, Ghaie S (1992) Networking by the Indian community in Northern Ireland, Working Paper. Imperial College, LondonGoogle Scholar
  18. Bonacich E, Light I, Wong C (1976) Small business among Koreans in Los Angeles. In: Gee E (eds) Counterpoint: perspectives on Asian America. Asian American Studies Center, Los AngelesGoogle Scholar
  19. Borjas G (1990) Friends or strangers: the impact of immigrants on the US economy. Basic Books, NewYorkGoogle Scholar
  20. Boubakri H (1999) Les Entrepreneurs Migrants d’Europe. Paris: Culture & Conflits, Sociologie Politique de l’International, Printemps-Été, ParisGoogle Scholar
  21. Bourdieu P (1986) The forms of capital. In: Richardson JG (eds) Handbook for theory and research for the sociology of education. Greenwood, New York, pp 241–258Google Scholar
  22. Brown TC, Hanlon D (2004) Validation of key behaviours for effective entrepreneurship. Paper presented at the BKERC, Glasgow, 3–5 JuneGoogle Scholar
  23. Brücker H, Epstein GS, McCormick B, Saint-Paul G, Venturini A, Zimmermann KF (2002) Managing migration in the European welfare state. In: Boeri T, Hanson G, McCormick B (eds) Immigration policy and the welfare system. Oxford University Press, Oxford, pp 1–168Google Scholar
  24. Butler JS, Greene PG (1997) Ethnic entrepreneurship: the continuous rebirth of American entrepreneurship. In: Sexton DL, Smilor RW (eds) Entrepreneurship 2000. Upstart Publishing, Chicago, pp 267–289Google Scholar
  25. Carland J, Carland JC (1993) The role of personality in new venture creation. Entrepreneur Innov Change 2(2): 129–140Google Scholar
  26. CEEDR (2000) Young entrepreneurs, women entrepreneurs, ethnic minority entrepreneurs and co-entrepreneurs in the European Union and Central and Eastern Europe. Final Report to the European Commission, DG Enterprise, Centre for Enterprise and Economic Development Research (CEEDR) Middlesex University Business School, UKGoogle Scholar
  27. Charnes A, Cooper WW, Rhodes E (1978) Measuring the efficiency of decision making units. Eur J Oper Res 2: 429–444CrossRefGoogle Scholar
  28. Choenni A (1997) Veelsoortig Assortiment. Het Spinhuis, AmsterdamGoogle Scholar
  29. Chou YK (2006) Three simple models of social capital and economic growth. J Soc Econ 35(5): 889–912CrossRefGoogle Scholar
  30. Cooper A, Gimeno-Gascon J, Woo C (1994) Initial human and financial capital as Predictors of new ventures performance. J Bus Ventur 9: 371–395CrossRefGoogle Scholar
  31. Cracolici MF, Nijkamp P (2006) Competition among tourist destinations. In: Giaoutzi M, Nijkamp P (eds) Tourism and regional development. Ashgate, Aldershot, pp 133–152Google Scholar
  32. Dagevos J, Gesthuizen M (2005) Niet-westerse Allochtonen met een Stabiele Arbeidsmarktpositie: Aantallen en Ontwikkelingen. Sociaal en Cultureel Planbureau, Den HaagGoogle Scholar
  33. Dasgupta, P, Serageldin, I (eds) (1999) Social capital. A multifaceted perspective. The World Bank, Washington, DCGoogle Scholar
  34. De Carolis D, Saparito P (2006) Social capital, cognition and entrepreneurial opportunities: a theoretical framework. Entrepreneur Theory Pract 30(1): 41–56CrossRefGoogle Scholar
  35. Deakins D, Majunder M, Paddison A (1997) Developing success strategies for ethnic minorities in business: evidence from Scotland. New Commun 23: 325–342Google Scholar
  36. Delft H, van Gorter C, Nijkamp P (2000) In search of ethnic entrepreneurship in the city. Environ Planning C 18: 429–451CrossRefGoogle Scholar
  37. Dhaliwal S (1998) Silent contributors: Asian female entrepreneurs and women in business. Womens Stud Int Forum 21(5): 463–474CrossRefGoogle Scholar
  38. Driessen M, Zwart P (2006) De E-scan Ondernemerstest ter Beoordeling van Ondernemerschap. MAB 80(7/8): 382–391Google Scholar
  39. Dyer LM, Ross CA (2000) Ethnic enterprises and their clientele. J Small Bus Manag 38(2): 48–66Google Scholar
  40. Evans MDR (1989) Immigrant entrepreneurship: effects of ethnic market size and isolated labor pool. Am Soc Rev 54: 950–962CrossRefGoogle Scholar
  41. Fairlie RW (1999) The absence of the African-American owned business: an analysis of the dynamics of self-employment. J Labor Econ 17: 80–108CrossRefGoogle Scholar
  42. Farrell MJ (1957) The measurement of productive efficiency. J R Stat Soc Ser A 120: 253–281CrossRefGoogle Scholar
  43. Florin J, Lubatkin M, Schulze W (2003) A social capital model of high-growth ventures. Acad Manag J 46(3): 374–384CrossRefGoogle Scholar
  44. Fratoe F (1988) Social capital and black business owners. Rev Black Polit Econ 16(4): 33–50CrossRefGoogle Scholar
  45. Fukuyama F (1995) Trust: social virtues and the creation of prosperity. Free Press, New YorkGoogle Scholar
  46. Glaeser EL, Laibson DK, Scheinkman JA, Soutter CL (2000) Measuring trust. Q J Econ 115(3): 811–846CrossRefGoogle Scholar
  47. Greenwood MJ (1994) Potential channels of immigrants influence on the economy of the receiving country. Pap Reg Sci 73: 211–240CrossRefGoogle Scholar
  48. Hammarstedt M (2001) Immigrant self-employment in Sweden—its variation and some possible determinants. Entrepreneur Reg Dev 13: 147–161CrossRefGoogle Scholar
  49. Hansemark O (1998) The effects of an entrepreneurship programme on need for achievement and locus of control of reinforcement. Int J Entrepreneur Behav Res 4(1): 28–50CrossRefGoogle Scholar
  50. Hébert RF, Link AN (1989) In search of the meaning of entrepreneurship. Small Bus Econ 1: 39–49CrossRefGoogle Scholar
  51. Hipple S (2004) Self-employment in the United States: an update. Mon Labor Rev 13: 13Google Scholar
  52. Ho TS, Koh HC (1992) Differences in psychological characteristics between entrepreneurially inclined and non-entrepreneurially inclined accounting graduates in Singapore. Entrepreneur Innov Change 1: 243–254Google Scholar
  53. Holguin J, Gamboa E, Hoy F (2006) Challenges and opportunities for hispanic entrepreneurs in the United States. In: Dana LP (eds) Migrant entrepreneurship. Edward Elgar, Aldershot, pp 99–113Google Scholar
  54. Iyer GR, Shapiro JM (1999) Ethnic entrepreneurial and marketing systems: implications for the global economy. J Int Market 7(4): 83–110Google Scholar
  55. Jacobs J (1961) The life and death of great American cities. Random House, New YorkGoogle Scholar
  56. Johnson BR (1990) Toward a multidimensional model of entrepreneurship: the case of achievement motivation and the entrepreneur. Entrepreneur Theory Pract, pp 39–54Google Scholar
  57. Kakati M (2003) Success criteria in high-tech new firms. Technovation 23: 447–457CrossRefGoogle Scholar
  58. Kalantardis C, Bika Z (2006) In-migrant entrepreneurship in rural England: beyond local embeddedness. Entrepreneur Reg Dev 18: 109–131CrossRefGoogle Scholar
  59. Keeble D (1989) High technology industry and regional development in Britain: the case of the Cambridge phenomenon. Gov Policy 7: 152–172Google Scholar
  60. Keeble D, Tyler P (1995) Enterprising behaviour and the urban-rural shift. Urban Stud 32(6): 975–997CrossRefGoogle Scholar
  61. Kim Ph.H, Aldrich HE, Keister LA (2003) Access (not) denied: the impact of financial, human and cultural capital on entrepreneurial entry in the United States. Small Bus Econ 27(1): 5–22CrossRefGoogle Scholar
  62. Köllinger P, Minniti M (2006) Not for a lack of trying: American entrepreneurship in black and white. Small Bus Econ 27: 59–79CrossRefGoogle Scholar
  63. Lee HS, Chang S (2005) Environmental jolts, internal buffers, and failures versus survivals of high-technology based ventures. Paper presented at BKERC, Boston, 8–11 JuneGoogle Scholar
  64. Lee J, Lee S (2004) Failure factors of new technology-based ventures according to the growth stages, frontiers of entrepreneurship research. Babson College, Wellesley, pp 1–14Google Scholar
  65. Lejpras A, Stephan A (2009) Locational conditions, cooperation, and innovativeness: evidence from research and company spin-offs. Ann Reg Sci (forthcoming)Google Scholar
  66. Levie J (2007) Immigration, in-migration, ethnicity and entrepreneurship: insights from the GEM UK Database. Small Bus Econ 28(2): 143–169CrossRefGoogle Scholar
  67. Levie J, Smallbone D (2006) Entrepreneurship, ethnicity and migration: current trends and future directions. In: Minniti M (eds) Perspectives on entrepreneurship, vol 1. Praeger, Westport, pp 157–180Google Scholar
  68. Light I (1984) Immigrant and ethnic enterprise in North America. Ethn Racial Stud 7: 195–216CrossRefGoogle Scholar
  69. Light I, Gold SJ (2000) Ethnic economies. Academic Press, San DiegoGoogle Scholar
  70. Light I, Roach E (1996) Self-employment: mobility ladder or economic lifeboat. In: Waldinger R, Bozorgmehr M (eds) Ethnic Los Angeles. Russell Sage Foundation, New York, pp 193–213Google Scholar
  71. Light I, Rosenstein C (1995) Race, ethnicity and entrepreneurship in urban America. Aidine de Gruyter, New YorkGoogle Scholar
  72. Lumpkin GT, Dess GG (1996) Clarifying the entrepreneurial orientation and linking it to performance. Acad Manag Rev 21: 135–152CrossRefGoogle Scholar
  73. Marger M (1989) Business strategies among East-Indian entrepreneurs in Toronto: the role of group resources and opportunity structure. Ethn Racial Stud 12: 539–563CrossRefGoogle Scholar
  74. Masurel E, Nijkamp P, Tastan M, Vindigni G (2002) Motivations and performance conditions for ethnic entrepreneurship. Growth Change 33(2): 238–260CrossRefGoogle Scholar
  75. Menzies TV, Brenner GA, Filion LJ (2003) Social capital, networks and ethnic minority entrepreneurs: transnational entrepreneurship and bootstrap capitalism. In: Etemad H, Wright RW (eds) Globalization and entrepreneurship: policy and strategy perspectives. Edward Elgar, Northampton, pp 125–151Google Scholar
  76. Menzies TV, Doichon M, Gasse Y, Elgie S (2006) A longitudinal study of the characteristic, business creation process and outcome differences of Canadian female vs. male nascent entrepreneurs. Int Entrepreneur Manag J 2: 441–453CrossRefGoogle Scholar
  77. Mesch GS, Czamanski D (1997) Occupational closure and immigrant entrepreneurship: Russian Jews in Israel. J Soc Econ 26: 597–610CrossRefGoogle Scholar
  78. Min PG (1987) Factors contributing to ethnic business: a comprehensive synthesis. Int J Comp Sociol 28(3/4): 173–193CrossRefGoogle Scholar
  79. Mueller P (2005) Exploring the knowledge filter—how entrepreneurship and university–industry relations drive economic growth. ERSA conference papers ersa05p610, European Regional Science AssociationGoogle Scholar
  80. Nahapiet J, Ghoshal S (1998) Social capital, intellectual capital, and the organizational advantage. Acad Manag Rev 23(2): 242–266CrossRefGoogle Scholar
  81. Nijkamp P (2003) Entrepreneurship in a modern network economy. Reg Stud 37(4): 395–405CrossRefGoogle Scholar
  82. Nijkamp P, Sahin M, Suzuki S (2008) Migrant Entrepreneurs and the struggle for survival, a comparative study on the efficiency performance of migrant entrepreneurs in Amsterdam by means of data envelopment analysis. Reg Stud (forthcoming)Google Scholar
  83. Oort FJ, van Atzema OALC (2004) On the conceptualization of agglomeration economics: the case of new firm formation in the Dutch ICT sector. Ann Reg Sci 38: 263–290CrossRefGoogle Scholar
  84. Peterson MF, Roquebert J (1993) Success patterns of Cuban-American enterprises: implications for entrepreneurial communities. Hum Relat 46: 921–935CrossRefGoogle Scholar
  85. Phizaklea A, Ram M (1996) Being your own boss: ethnic minority entrepreneurs in comparative perspective. Work, Employment and Society 10(2)Google Scholar
  86. Portes A, Zhou M (1996) Self-employment and the earnings of immigrants. Am Sociol Rev 61(2): 219–230CrossRefGoogle Scholar
  87. Prashantham S (2006) Foreign network relationships and the internationalization of small knowledge-intensive firms. Int J Entrepreneur Innov Manag 6(6): 542–553CrossRefGoogle Scholar
  88. Putnam R (2000) Bowling alone: the collapse and revival of American community. Simon & Schuster, New YorkGoogle Scholar
  89. Ram M (1994) Managing to survive: working lives in small firms. Blackwell, OxfordGoogle Scholar
  90. Richtmyer R (2002) KEMET building ties with Japan. US Dept of Commerce, Bureau of the CensusGoogle Scholar
  91. Robb A, Fairlie R (2007) Access to financial capital among U.S. businesses: the case of African American firms. Ann Am Acad Polit Soc Sci 613: 4–72CrossRefGoogle Scholar
  92. Sahin M, Nijkamp P, Baycan-Levent T (2006) Is migrant entrepreneurship from the perspective of cultural diversity. In: Dana LP (eds) Migrant entrepreneurship. Edward Elgar, Aldershot, pp 99–113Google Scholar
  93. Sahin M, Nijkamp P, Baycan-Levent T (2007) Migrant entrepreneurship from the perspective of cultural diversity. In: Aktan CC (eds) Advances in business and management. Cesme, Izmir, pp 103–121Google Scholar
  94. Sanders J, Nee V (1996) Immigrant self employment: the family as social capital and the value of human capital. Am Sociol Rev 61: 231–249CrossRefGoogle Scholar
  95. Shepherd DA, Douglas EJ, Shanley M (2000) New venture survival: ignorance, external shocks, and risk reduction strategies. J Bus Ventur 15: 393–410CrossRefGoogle Scholar
  96. Shin E, Han S (1990) Korean immigrant small businesses in Chicago: an analysis of the resource mobilization process. Amerasia J 16(1): 39–60Google Scholar
  97. Sobel J (2002) Can we trust social capital?. J Econ Lit XL: 139–154CrossRefGoogle Scholar
  98. Suzuki S, Nijkamp P, Rietveld P, Pels E (2007) Distance friction minimization approach in data envelopment analysis; an application to airport performance. Tinbergen Institute Discussion Paper TI 2009-024/3Google Scholar
  99. Tanaka S, Krishnan A (2006) Migration—migrant entrepreneurship; cities, magnets of hope, habitat debate. World Habitat Day, 2 October 2006Google Scholar
  100. Teder J, Golik M (2006) Ethnic minorities and entrepreneurship in Estonia. Paper presented at the 14th Nordic Conference on Small Business Research, Stockholm. http://www.ncsb2006.se/download_title.htm
  101. Teixeira C (1998) Cultural resources and ethnic entrepreneurship: a case study of the Portuguese real estate industry in Toronto. Can Geogr 42(3): 267–281CrossRefGoogle Scholar
  102. Tillie J, Slijper B (2006) Immigrant political integration and ethnic civic communities in Amsterdam. In: Benhabib S, Shapiro I (eds) Identities, allegiances and affiliations. Cambridge University Press, CambridgeGoogle Scholar
  103. Torres DL (1988) Success and the Mexican-American business person. Res Sociol Organ 6: 313–334Google Scholar
  104. Velde MEG, van Jansen PGW, Telting IA (2000) Bedrijfswetenschappelijk Onderzoek: Van Probleemstelling tot Presentatie. Nelissen, BaarnGoogle Scholar
  105. Waldinger R (1988) The ethnic division of labour transformed: native minorities and new immigrants in post-industrial New York. New Community 14(3)Google Scholar
  106. Waldinger, R, Aldrich, H, Ward, R (eds) (1990) Entrepreneurs. Sage Publishers, Newbury ParkGoogle Scholar
  107. Walton-Roberts M, Hiebert D (1997) Immigration, entrepreneurship and the family: Indo-Canadian enterprise in the construction industry of greater vancouver. Can J Reg Sci 20(1–2): 119–140Google Scholar
  108. Ward, R, Jenkins, R (eds) (1984) Ethnic communities in business. Cambridge University Press, CambridgeGoogle Scholar
  109. Wennekers S, Thurik AR (1999) Linking entrepreneurship and economic growth. Small Bus Econ 13(1): 27–55CrossRefGoogle Scholar
  110. Werbner P (1999) What colour ‘success’? Distorting value in studies of ethnic entrepreneurship. Sociol Rev 47(3): 548–579CrossRefGoogle Scholar
  111. Westlund H, Bolton R (2003) Local social capital and entrepreneurship. Small Bus Econ 21: 77–113CrossRefGoogle Scholar
  112. Westlund H, Nilsson E (2005) Measuring enterprises: investments in social capital. Reg Stud 39(8): 1079– 1094CrossRefGoogle Scholar
  113. Yu J, Stough RR (2006) The determinants of entrepreneurship and development in China. Int J Manag Entrepreneur Dev 3(1/2): 30–52Google Scholar
  114. Yuengert AM (1995) Testing hypotheses of immigrant self-employment. J Hum Res XXX(1)Google Scholar
  115. Zorlu A, Traag T (2005) Opleidingsniveau en taalvaardigheid [Educational level and language proficiency]. Jaarrapport Integratie 2005, SCP/WODC/CBS, The HagueGoogle Scholar

Copyright information

© The Author(s) 2010

Authors and Affiliations

  1. 1.Department of Spatial EconomicsVU UniversityAmsterdamThe Netherlands
  2. 2.School of Public PolicyGeorge Mason UniversityFairfaxUSA

Personalised recommendations