Abstract
Recently, the entrepreneurial potential of refugees has received growing attention from scholars and policymakers. However, the literature on refugee entrepreneurship suffers from the fragmentation of previous research findings, which has been mainly attributed to the fact that refugees have heterogeneous backgrounds. Tackling this challenge, this study conceptualized the framework for the multiple embeddedness of refugee entrepreneurs by applying and extending the concept of mixed embeddedness. Based on 50 semi-structured interviews with refugee entrepreneurs who relocated to Germany, France, and Ireland, we identified six patterns in which refugees’ multiple embeddedness and their actions as entrepreneurial agencies interacted to develop entrepreneurial opportunities: (i) value creation with homeland resources, (ii) acting as transnational middleman minorities, (iii) integration facilitation, (iv) qualification transfers, (v) homeland-problem solving, and (vi) creative innovation. This study contributes to the literature on refugee entrepreneurship by considering multiple contexts in which refugees can be embedded in and by elaborating on the interactions between opportunity structure emerging within the multiple embeddedness, actions, and capabilities of refugees as entrepreneurial agencies.
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Introduction
The world faces one of the most critical challenges in modern history related to global forced displacement. By the end of 2019, approximately 79.5 million individuals were forcibly displaced globally. The vast majority of refugees and asylum seekersFootnote 1 originate from emerging countries, and more than two-thirds (68%) of all worldwide refugees come from five countries: Syria (6.6 million), Venezuela (3.7 million), Afghanistan (2.7 million), South Sudan (2.2 million), and Myanmar (1.1 million) (UNHCR 2020). Many forcibly displaced individuals do not end their journey in neighboring countries but continue until they arrive in Europe. In 2019, Germany was the world’s third-largest recipient of refugees, with 142,500 new asylum claims, followed by France, with 123,900 claims (UNHCR 2020). The surge of incoming refugees poses a critical challenge to policymakers in European countries who face increasingly urgent demands to facilitate the socio-economic integration of newcomers.
In recent years, scholars have paid attention to the entrepreneurial potential of refugees (Betts et al. 2014; Bizri 2017; Shepherd et al. 2020; Wauters and Lambrecht 2008). Researchers have studied different aspects of refugee entrepreneurship, such as social capital (Bizri 2017; Mboko 2020; Yassine et al. 2019), innovations created by refugees (Betts and Bloom 2015), entrepreneurial intention (Alexandre et al. 2019; Mawson and Kasem 2019), barriers that refugees face in the host country (Alrawadieh et al. 2018; Kachkar 2018; Wauters and Lambrecht 2008), support programs for refugee entrepreneurs (Harima et al. 2019; Meister and Mauer 2019), social entrepreneurship for and by refugees (Freudenberg and Halberstadt 2018), and psychological factors such as resilience and hope (Freiling and Harima 2019; Shepherd et al. 2020).
While these studies have revealed many aspects of the phenomenon of refugee entrepreneurship, literature suffers from a fundamental problem: findings are highly context-specific and therefore fragmented (Heilbrunn et al. 2019). The challenges that refugees face in the host country differ significantly depending on various factors, such as refugees’ human and social capital, their newness and foreignness to the host-country, and institutional differences between the home and host country. Therefore, the current research status calls for a new approach to understand the fundamental construct that allows scholars to investigate the diversity of refugee entrepreneurship.
This study selected the concept of embeddedness (Granovetter 1985), as it enabled us to examine the situational settings of refugees at various institutional levels. Furthermore, our study highlights the thesis of mixed embeddedness (Kloosterman 2010; Kloosterman et al. 1999), which has been applied to research on migrant entrepreneurs in various contexts in recent decades. By focusing on the weaknesses of mixed embeddedness and the need to adapt it to the refugee context, we advocate conceptualizing the multiple embeddedness of refugee entrepreneurship.
Based on the research gap in the literature, this study aimed to explore the interrelation between the multiple embeddedness of refugee entrepreneurship—which forms a particular type of opportunity structure—and refugee individuals, who construct opportunities as an entrepreneurial agency. Based on 50 semi-structured interviews with (nascent) refugee entrepreneurs from emerging countries who relocated to Germany, France, and Ireland, we identified six patterns showing how refugees used their multiple embeddedness to create entrepreneurial opportunities. This study, therefore, sought to answer the following research questions: (1) How are the entrepreneurial activities of refugees from emerging countries embedded in multiple contexts? (2) How do refugees from emerging countries construct entrepreneurial opportunities, and (3) how do their traits of multiple embeddedness and entrepreneurial agency interplay? This study contributes to recent scholarly discussions on refugee entrepreneurship, which currently suffer from a high degree of heterogeneity in refugee backgrounds and contexts, by exploring the multiple embeddedness of refugees as a fundamental dimension to differentiate refugees as entrepreneurial agencies.
The structure of this paper is as follows: Firstly, the literature on refugee entrepreneurship and the concept of embeddedness is presented. Based on the literature review, this conceptualization of the multiple embeddedness of refugee entrepreneurship is highlighted through the different contexts in which refugees are embedded. Secondly, we explain our methodological approach regarding the selected research design, empirical data, and data analysis strategy. The third part consists of two sections: a descriptive data presentation about the multiple embeddedness of examined refugee entrepreneurs and six patterns of refugee entrepreneurship that were identified from the empirical data. Finally, we discuss the scientific value of our research findings and conclude with practical implications, limitations, and a future outlook.
Conceptual Background
Refugee Entrepreneurship
In recent decades, researchers have classified migrants as entrepreneurial agents who contribute to the economies of both their home and host countries (cf. Aldrich and Waldinger 1990; Portes and Jensen 1992; Rath 2002; Waldinger 1989). However, in the lengthy research history of migration entrepreneurship, a majority of scholars have not treated refugees as distinct from migrants despite the significant differences between these two groups. Wauters and Lambrecht (2006, 2008), who conducted pioneer studies that illuminated the entrepreneurial activities of refugees, have argued that refugee entrepreneurship should be investigated as a separate research domain for several reasons: Firstly, refugees are more likely than migrants to have less extensive networks in their new host countries. Secondly, refugees have limited possibilities to return to their home countries, which hinders their ability to mobilize homeland resources. Thirdly, refugees experience traumatic events that can harm their mental and psychological well-being, consequently hampering their entrepreneurial activities.
Despite the substantial consideration of Wauters and Lambrecht, it took several years for their research contributions to gain scholarly attention during the recent global refugee crisis that evoked intensive scholarly discussions on the entrepreneurial potential of refugees (Desai et al. 2020). One reason for the rapidly growing interest is the stringent necessity to facilitate the economic integration of refugees in the host country (Karakas 2015). Scholars consider entrepreneurship as a useful but frequently necessary option for refugees to integrate themselves into the economic systems and societies of host countries (Collins 2017; Freudenberg and Halberstadt 2018). While both public and private sectors have made substantial efforts to facilitate the employment of newly arriving refugees in the European Union (EU), refugees commonly suffer from the so-called “refugee gap” (Bakker et al. 2017; Connor 2010; Easton-Calabria and Omata 2016) or “canvas ceiling” (Lee et al. 2020), which hypothesizes that labor-market disadvantages exist for refugees. As a result of the lack of vocational opportunities in the host country, several refugees are pushed to self-employment (Backman et al. 2020; Van Kooy 2016; Shneikat and Alrawadieh 2019). Furthermore, refugees must handle the psychological burden of career disruption in their home countries and re-establish their lives more or less from scratch in their host countries (Shneikat and Ryan 2018; Wehrle et al. 2018). Since the labor-market disadvantages threaten their previous identities, several refugees seek entrepreneurial paths to find a way to build alternative careers.
Another reason why refugee entrepreneurship has swiftly gained publicity is the potential of refugees to be entrepreneurial agencies. Several studies have revealed that refugees have a substantial propensity and desire for entrepreneurship (Alexandre et al. 2019; Mawson and Kasem 2019; Obschonka et al. 2018). Despite traumatic experiences in their home countries and adverse situations in new circumstances, in which refugees need to reconstruct their lives while overcoming various institutional barriers, refugees can demonstrate resilience through entrepreneurial activities (Dionigi 2016; Pieloch et al. 2016; Shepherd et al. 2020). In their entrepreneurial activities, refugees contribute to their host societies by offering not only economic but also various types of socio-political values. Previous studies have highlighted refugee entrepreneurship as a source of innovation (Betts and Bloom 2015) that promotes the homeland’s culture (Tavakoli 2020) and fills institutional voids within refugee camps (de la Chaux and Haugh 2020). Refugee entrepreneurial activities are additionally a mechanism to counter xenophobia (de Mello 2018), improve the image of refugees (Turner 2020), contribute to political activism (Lee 2018), and enrich spatial practices in urban areas (Harb et al. 2019).
While the significance of refugee entrepreneurial potential to the host country has gained consensus from both researchers and policymakers in recent years, research has shed light on several disadvantages of entrepreneurship specific to the refugee setting in a host country. Firstly, refugees face institutional barriers in the host country, such as legal issues, socio-cultural and market-related obstacles (Alrawadieh et al. 2019; Kachkar et al. 2016), a lack of access to support systems and infrastructure (Chadderton and Edmonds 2014; Kachkar et al. 2016), and a lack of financial resources (Harb et al. 2019; Wauters and Lambrecht 2008). Secondly, due to the forced departure from their home country and the newness of host societies, refugees generally face severe resource constraints (Freiling and Harima 2019; Heilbrunn 2019; Wauters and Lambrecht 2008). Nevertheless, all resources are not equally scarce. When investigating victim entrepreneurs of natural disasters, for instance, Williams and Shepherd (2016) found that disasters can constrain resources for entrepreneurs through the loss of property and loved ones, while other pre-disaster resources, such as human capital (startup experience, education, and work experience), remain. In the case of forced displacement, refugee human capital may be temporarily deactivated due to the institutional differences between the home and host countries. Thirdly, refugees frequently experience traumatic events in their home countries, and during the journey to their countries of residence (Wauters and Lambrecht 2008), they face psychological disturbances known as “refugee trauma” (cf. Pugliese 2009; Rothe et al. 2002; Weine et al. 2004). On the one hand, trauma may hamper the entrepreneurial motivation and aspiration of refugees; on the other hand, researchers have discovered the mediating effect of resilience, which allows refugees to overcome traumatic experiences through their entrepreneurial activities (de Mello 2018; Goodman et al. 2017; Nanda and Khanna 2010; Schmitz et al. 2013).
Wrestling with adverse situations and resource constraints in host countries, refugees develop unique entrepreneurial strategies. For instance, refugees have limited social capital both in their home and host countries. They are either disconnected from their previous networks or unable to use these networks due to conflict and political instability, and the newness and foreignness of refugees to the host society further complicates the development of new networks. Yassine et al. (2019) have observed that Syrian refugees in Lebanon create protective spatial clusters with their relatives and close acquaintances. Similarly, Bizri (2017) investigated a Syrian refugee in Lebanon, revealing distinctive networking behaviors, including pseudo-family business perception and collective bootstrapping. Another observed entrepreneurial action of refugees to overcome constraints was their method of resource mobilization through entrepreneurial bricolage (Heilbrunn 2019; Kwong et al. 2019).
While the recent surge in academic publications on refugee entrepreneurship has contributed to developing the scholarly understanding of refugees as distinctive entrepreneurial agents, the research on refugee entrepreneurship currently faces challenges in moving to the next stage. A major problem is the heterogeneity of refugee entrepreneurship, which has caused the fragmentation of previous research findings and hindered the creation of generalizable knowledge. What defines a refugee is a forcible displacement, which therefore does not specify refugee nationality, demographic background, education level, skills, and qualifications, nor the types and industries of their entrepreneurial activities (Heilbrunn et al. 2019).
One dimension contributing to refugee heterogeneity is the institutional distance between a home and host country, which determines the significance of institutional barriers faced by a refugee (Alexandre et al. 2019). For instance, refugees conducting informal entrepreneurial actions in refugee camps in neighboring countries (Betts et al. 2018; de la Chaux and Haugh 2020; Ranalli 2014) have different institutional circumstances from those who engage in formal business in the EU (Hartmann and Schilling 2019; Kolb 2019; Lundborg 2013; Rashid 2018). The former is less likely than the latter to face legislative and socio-cultural obstacles. Another dimension is time. On the one hand, a refugee’s liabilities caused by their newness and foreignness to homeland institutions decrease as their integration advances over time. On the other hand, the disconnected ties to the home country caused by conflicts, political instability, as well as persecution, tend to improve after some time. As a result, they can return to their home country or engage in transnational entrepreneurial activities (Halilovich and Efendic 2019). Nevertheless, time does not necessarily solve all the issues caused by forcible displacement. Long-standing conflicts have caused several refugee populations, such as Palestinian and Tibetan refugees, to remain disconnected from their homelands over generations (Nayak et al. 2019; Shepherd et al. 2020; UNHCR 2016).
Against the background of the literature, the current research status calls for a new conceptual approach that scholars can apply to understand the fundamental nature of refugee entrepreneurs despite their various settings and backgrounds. In the next section, we introduce the concept of embeddedness as a conceptual lens, which allowed us to develop a general analytical framework to understand the entrepreneurial opportunities that refugees pursue in different contexts.
Embeddedness and Entrepreneurial Opportunity
Embeddedness is a concept originally coined by Karl Polanyi, an Austro-Hungarian economic anthropologist representing substantivism in the mid-19th century (Polanyi 1944). Rejecting the thesis of self-interest, Polanyi argued that economic behaviors are embedded in social relations (Levi and Pellegrin-Rescia 1997). In the 1980s, Mark Granovetter, a United States (US) sociologist, re-introduced this concept by arguing that economic actors are embedded in social and structural relations (Granovetter 1985). This concept has gained attention from the broad academic audience and has been applied to different fields of management science, such as inter-firm networks (Johannisson et al. 2002; Simsek et al. 2003; Uzzi 1997; Yli-Renko and Autio 1998), international business (Ferraris et al. 2018; Heidenreich 2012; Mattes 2013; Meyer et al. 2011), family business (Aldrich and Cliff 2003; Mari et al. 2016; Steier et al. 2009; Wiklund et al. 2013), non-profit organizations and social entrepreneurship (Hager et al. 2004; Kistruck and Beamish 2010; Seelos et al. 2011), and rural entrepreneurship (Akgün et al. 2010; Cabras and Mount 2016; Jack and Anderson 2002; Kalantaridis and Bika 2006; Korsgaard et al. 2015).
In entrepreneurship research, Jack and Anderson (2002) have argued for the effect of embeddedness in the entrepreneurial process by emphasizing the role of entrepreneurs. While acknowledging social embeddedness as a source for entrepreneurial resources, they have advocated that “opportunities were found to exist within the structure but only became manifest by the action of entrepreneurial agency” (p.468). Scholars have additionally pointed out that embeddedness can be a source of dependency on a particular tie that causes resource acquisition costs or opportunity and resource constraints (Jack and Anderson 2002; Newbert and Tornikoski 2013).
Embeddedness is a multi-faceted concept that challenges scholars to tackle its complexity by elaborating on various types of embeddedness. For instance, Granovetter (1985) studied relational and structural embeddedness: the former referring to the ties of individuals to other agents, with the latter describing the network’s overall architecture. Simsek et al. (2003) have distinguished three types of embeddedness: structural (network closure), relational (institutionalized reciprocity), and cognitive (cognitive similarity). Scholars consider embeddedness not only in terms of economic interactions in the physical world but also in terms of virtual and technological contexts (Morse et al. 2007; Volkoff et al. 2007).
In migration studies of recent decades, the concept of embeddedness has played a significant role in understanding the unique setting of entrepreneurs with migration experience (Portes and Sensenbrenner 1993; Waldinger 1989). The thesis of mixed embeddedness, in particular, which was originally proposed by Kloosterman et al. (1999), has become one of the most frequently applied conceptual tools for analyzing the entrepreneurial activities of migrants (Aliaga-Isla and Rialp 2013; Jones et al. 2014; Moyo 2014). Kloosterman et al. (1999) consider immigrants and their economic activities as being embedded in two different environments: ethnic networks as well as the socio-economic and politico-institutional environment of the country of settlement. Kloosterman et al. (1999) have further argued that the institutional context in which immigrants are situated largely determines the opportunity structure for their entrepreneurial activities, and they have developed a typology of the opportunity structure by highlighting two determining dimensions: immigrants’ human capital and the accessibility and growth potential of the market (Kloosterman 2010). Mixed embeddedness allows scholars to analyze the opportunity structure at three levels: national, urban or regional, and neighborhood (Kloosterman and Rath 2001). Mixed embeddedness additionally determines entrepreneurs’ access to resources due to the various institutional environment conditions properties (Ram et al. 2008).
The literature displays a universal enthusiasm toward the thesis of (mixed) embeddedness as a tool for explaining the fundamental characteristics of migrant entrepreneurs. Nevertheless, scholars have ruminatively raised two critical aspects of the concept. Firstly, the concept of embeddedness suffers from theoretical vagueness, as it explains the existence of interactions between entrepreneurial agents and the social structure, and it remains uncertain how economic action’s embeddedness in social structure leads to certain consequences (Portes and Sensenbrenner 1993). Sepulveda et al. (2011) have critiqued embeddedness for dichotomously dividing social structure and entrepreneurial agency, which hinders the careful consideration of their mutually constitutive nature. The deterministic structural aspect of mixed embeddedness is attributed to the initial assumption of Kloosterman et al. (1999) that migrant entrepreneurs are systematically excluded from the mainstream market (Kloosterman et al. 1999). Therefore, in discussions on mixed embeddedness, entrepreneurial opportunities are generally seen as a structure on the demand side rather than a construction process of entrepreneurial agents (Barrett et al. 2002; Kloosterman 2005; Kloosterman and Rath 2001). Embeddedness is inherently closely related to the earlier concept of opportunity structure, which explains that opportunities occur within a structure (Waldinger 1989; Waldinger et al. 1990). In other words, mixed embeddedness has not fully integrated the discussion among entrepreneurship scholars regarding the controversial approaches of opportunity discovery and opportunity creation (Alvarez and Barney 2007; Klein 2008), which leaves the role of migrants, as active entrepreneurial agents who construct opportunities, unclear.
Secondly in the literature on mixed embeddedness, the original thesis of mixed embeddedness emphasized the contextual duality of migrants solely in their countries of residence (Kloosterman 2010; Kloosterman et al. 1999), while later scholars have applied this concept to explain the multiple embeddedness of migrants in transnational contexts. Several studies have addressed this aspect of duality and extended the idea of integrating transnational and homeland contexts (Horst 2018; Lin et al. 2019). For instance, Rusinovic (2008) has coined the term “transnational embeddedness” by investigating transnational entrepreneurial activities among first- and second-generation migrants. Similarly, Bagwell (2015) has built on mixed embeddedness and proposed the existence of transnational mixed embeddedness. Since migrants conduct their businesses in various spatial spheres, analyses “frequently move between global, national, regional, and local scales without clearly specifying the relative relations between these scales and the interplay of structure and agency within these’ (Sepulveda et al. 2011, p. 474). Migrants, independently of whether they are forcibly displaced or voluntarily moved, are connected to different spatial and social contexts. Therefore, scholars must critically argue the quantity and characteristics of the settings relevant to the multiple embeddedness of entrepreneurs with migration backgrounds.
Multiple Embeddedness of Refugee Entrepreneurs
While mixed embeddedness is potentially helpful for understanding the context of refugee entrepreneurship, its application requires serious consideration of the distinctive characteristics of refugees as entrepreneurial agents in contrast to other types of migrants. In this section, we conceptualize the multiple embeddedness of refugee entrepreneurs by illuminating three major contexts: (i) home country, (ii) host country, and (iii) transnational sphere. The multiple embeddedness framework of refugee entrepreneurs is visualized in Fig. 1. Notably, the multiple embeddedness is not a static snapshot but a dynamic process that changes over time, as noted by Kloosterman et al. (1999), who note that “changing the mixture of embeddedness is an open, contingent social process” (p.263).
The first context of multiple embeddedness is the country of origin of refugees. Forcible displacement unavoidably changes the relationship between refugees and their home countries. Unlike migrants who voluntarily cross borders to seek new opportunities, refugees are forced to disconnect from networks, careers, and properties in their home countries due to political instability, persecution, conflicts, and war. In other words, refugees lose their embeddedness in homeland institutions, at least temporally and partly. In several cases, such as Bosnia and Herzegovina, the political situations of home countries eventually improve, which gives refugees the chance to return to their homelands or engage in transnational entrepreneurial activities with their home countries (Halilovich and Efendic 2019). In other cases, such as with Palestinian and Tibetan refugees, however, forcibly displaced migrants and their decedents remain stateless or in refugee status for generations, remaining disconnected from their home countries (Shepherd et al. 2020). The situation here is comparable to the notion of disembeddedness and re-embeddedness (Giddens 1990; Haunschild 2004; Levi and Pellegrin-Rescia 1997). Initially, the idea of disembeddedness emerged in discussions of modern economies and capitalism to describe the “lifting out” of social relations from local contexts (Giddens 1990). Forcible migration can be considered to be a disembedding process of refugees from their homeland institutional contexts, as forcible migration requires political transformation as well as individual efforts to realize re-embeddedness.
The second context of multiple embeddedness is the host country, which consists of four sub-contexts: (a) mainstream society, (b) refugee support environments, (c) ethnic community, and (d) refugee community. Firstly, refugees are assumed to be under-embedded in host societies since they are relatively new to their host-country institutions. Another cause of their under-embeddedness is that refugees generally do not know where their journeys of fleeing end, which makes it impossible for them to prepare for their new lives in specific countries (Wauters and Lambrecht 2008). Their foreignness to their host-country contexts depends, however, on institutional differences between their home and host countries (Alexandre et al. 2019). Integration into mainstream society can function more quickly and smoothly in neighboring states, which share similar culture and language to home countries, than in remote locations.
Secondly, as seen in Fig. 1, refugee support environments are depicted as a part of mainstream society, as the organizations and individuals belonging to refugee support environments are primarily from mainstream society but have closer and more unique relationships with refugees than general local individuals. Extant research has illuminated the role of refugee support organizations and business incubators for entrepreneurial refugees. For instance, McIntosh and Cockburn-Wootten (2019) have examined how refugee-focused service providers in New Zealand create an efficiently organized resettlement process. Furthermore, scholars have illuminated distinctive functions of business incubation programs that focus on refugee entrepreneurs, as such programs enable refugees to overcome the lack of host-country embeddedness or connect refugees to important contacts for their businesses (Harima et al. 2019; Meister and Mauer 2019). This type of embeddedness is somewhat specific to refugees, as they tend to arrive first at refugee camps where they receive help from such support organizations, while migrants are more likely to go to their own ethnic groups to rely on ethnic capital (Dana et al. 2019) or go to their diaspora networks (Kuznetsov 2006).
Thirdly, refugees can be embedded in the ethnic community, similar to other migrants. Migrants frequently rely on a community of individuals that share their ethnic backgrounds; these are known as ethnic enclaves (Waldinger 1993; Wilson and Martin 1982). Since an ethnic enclave offers a so-to-speak parallel market to the mainstream market, ethnic enclaves are usually a source of human and social capital, particularly for migrants, since migrants have resource constraints and face labor-market disadvantages. Nevertheless, there are two reasons why refugees are assumed to be less embedded in ethnic communities compared to other types of migrants. The first reason is that the formation of ethnic enclaves is closely related to the history of migration waves to the host country (cf. Chaney 2010; Qadeer et al. 2010). For instance, Vietnamese migrants who came to East Germany as guest workers after the Second World War formed their own ethnic enclave and have not closely interacted with Vietnamese “boat people”, who migrated to Germany as political refugees in 1970s and 1980s, until today. The latter group quickly integrated into mainstream society since they had higher educational backgrounds and were welcomed with favorable political integration measures in Germany (Chang et al. 2018; Dang and Harima 2020; Schwenkel 2015). The second reason why refugees are assumed to be less embedded in ethnic communities is that refugees frequently do not have the right to select their arrival locations in host countries, as host-country authorities allocate refugees to camps in different locations. Ethnic enclaves do not exist everywhere but only in certain locations where migrants are concentrated. As a result, many refugees are located in areas where no significant ethnic enclaves exist.
Fourthly, a sizable number of refugees in Europe are prone to a certain degree of embeddedness in the refugee community. This is because many refugees collaboratively organize or participate in their cross-border evacuation and spend time upon arrival at reception facilities. In several countries, the government supports or, further, obligates asylum seekers and refugees to take integration or language courses. In other words, refugees share a similar arrival and early-integration process, which naturally creates a community. Moreover, refugees share similar situations and experience, such as psychological trauma from their experiences in home countries (Goodman et al. 2017; Pugliese 2009; Schmitz et al. 2013), the act of fleeing (Wauters and Lambrecht 2008), career disruption, and labor-market disadvantage (Bakker et al. 2017; Connor 2010), regardless of their ethnic background.
In addition to the home-country and host-country contexts, refugees can be embedded in transnational contexts. Several refugees study or work abroad before fleeing their countries, which allows them to build transnational human and social capital (Cucculelli and Morettini 2012; Kariv et al. 2009; Moghaddam et al. 2018). Due to sharing the same or similar ethnic background, refugees may access transnational diaspora networks, which consist of globally displaced communities from their homelands (Dutia 2012; Newland and Tanaka 2010). Furthermore, the literature suggests that refugees have the potential to engage in transnational business activities between their home and host countries as their home country conditions improve (Halilovich and Efendic 2019).
Thus far, we have acknowledged both the usefulness and potential problems of the application of the concept of (mixed) embeddedness to the refugee entrepreneurship context. Based on the preceding studies and arguments for the peculiarities of the contexts in which refugee entrepreneurs are situated, we extended the understandings of mixed embeddedness to conceptualize a framework of multiple embeddedness. In this study, this framework served as an analytical tool to understand how refugees create entrepreneurial opportunities as entrepreneurial agents in their embedded settings.
Methodology
Research Design
This study relied on 50 semi-structured interviews with refugee entrepreneurs in Europe as the primary data source. The data was collected in 2018 as a part of an EU project (anonymized for the blind-review process) that aimed to build a digital support system for refugees who planned to start businesses in their host countries. More specifically, we collected 20 interviews in Germany, 20 interviews in France, and 10 interviews in Ireland. According to the United Nations High Commissioner for Refugees (UNHCR 2020), the numbers of refugees in these countries in 2019 were as follows: 1,146,685 in Germany; 407,923 in France; and 7,800 in Ireland. We followed the social constructivist approach, which allowed us to understand and examine refugee entrepreneurial activities as a socially situated phenomenon (Dana and Dumez 2015; Kukla 2000). The research process was abductive: Firstly, we developed an analytical framework for the multiple embeddedness of refugee entrepreneurs by critically reviewing the literature on refugee entrepreneurship and embeddedness (see Fig. 1). This framework made the balance and mix of multiple embeddedness intuitively graspable through visualization. The visual presentation of the institutional contexts in which refugee entrepreneurs were embedded allowed us to examine the interaction between opportunity structure and entrepreneurial agency. Secondly, we analyzed the data in an abductive manner by applying this framework.
Research Settings – Refugee Entrepreneurship in Germany, France, and Ireland
In previous years, Germany received a large number of migrants and refugees and currently hosts the third-largest displaced population in the world (UNHCR 2020). UNHCR (2020) reported that Germany had 1,146,685 refugees and 309,262 asylum seekers at the end of 2019. Upon arrival, all individuals seeking asylum in Germany are registered at the Central Register of Foreigners (‘Ausländerzentralregister’), and newly arriving asylum seekers are distributed to nearby reception facilities of the federal state (‘Bundesland’) that provide newcomers with temporary accommodations until their applications decisions are made (Federal Office for Migration and Refugees 2019). Regulated by the Asylum Seekers’ Benefits Act (‘Asylbeweberleistungsgesetz’), asylum seekers receive benefits from public support through a monthly subsidy payment to cover daily personal expenses and basic supplies, including food, housing, heating, clothing, healthcare, and personal hygiene products. While there are various legal types of protection, those who are successful in the asylum-seeking process receive temporary resident permits that generally last for three to five years, with the possibility of obtaining a settlement permit after the fulfilment of requirements related to their economic situations and German-language capabilities. With a temporary residence permit, refugees can become self-employed in Germany (IQ Fachstelle: Migrantenökonomie n.d.). The Federal Office for Migration and Refugees (‘Bundesamt für Migration und Flüchtlinge’) commonly requires asylum seekers and refugees to attend an integration course to learn the language, culture, and history of Germany. Although it is possible for refugees to engage in full-time or part-time economic activities while attending the course, many refugees have difficulty finding a job due to a lack of institutional knowledge and having unrecognized qualifications (Degler and Liebig 2017; Gericke et al. 2018).
In addition to Germany, France is an important host-country for refugees and asylum seekers (respectively hosting 407,923 and 102,157 by the end of 2019). After arrival, asylum seekers must start the asylum procedure by registering in the prefecture. The authority in the prefecture verifies the request to confirm whether or not France can be responsible for that particular asylum application. Once the applicant is in possession of a certificate of asylum application issued by the prefectural authority, they must send a request to the French Office for the Protection of Refugees and Stateless Persons (OFPRA – “Office français de protection des réfugiés et apatrides”). Until a decision is made by the OFPRA, asylum seekers can benefit from financial assistance called an “asylum seekers allowance” (“Allocation pour Demandeur d’Asile” = ADAFootnote 2). Asylum seekers additionally benefit from access to public education as well as access to Universal Health Care Coverage (‘Couverture Maladie Universelle’ = CMU). In terms of the labor market, however, asylum seekers have limited access (gained after six months without a decision from the OFPRA and under certain specific conditions of the local labor market) and no right to self-employment (with the right to create non-profit organizations, however). Asylum seekers who successfully obtain refugee status receive a 10-year residency permit for both themselves and their families, and they maintain their right to education and healthcare. Additionally, successful asylum applicants receive the right to administrative and legal protection as well as free access to the labor market, which includes the right to self-employment. However, these rights are only granted after applicants sign a “Welcome and Integration Contract” (“Contrat d’acceuil et d’intégration” = CAI), which implies participation in a civic education program, an information session on life in France, a language training session, a professional skills assessment, ational Protection Act of 2015nd access to social support if necessary.
While Germany and France are the largest refugee receiving countries in Europe, the situation in Ireland is different. There were 4,873 asylum applications in Ireland in 2019, which was a 22% year-over-year increase (UNHCR 2020). In Ireland, an application for asylum can only be made upon arrival within five days at the International Protection Office. Applications are processed in accordance with the International Protection Act of 2015. A short application form and interview are followed by a longer application form and interview process. Applicants are issued a temporary residence certificate showing that an application is in process and that the applicant has been granted temporary residence in Ireland. Accommodation at a reception center for refugees is organized by the Reception and Integration Agency (RIA). During the application process, asylum seekers receive a small payment each week and are entitled to the same health services as Irish citizens. Legal support is additionally available to asylum seekers through the Legal Aid Board. The application process lasts approximately six months, after which successful applicants granted refugee status or subsidiary protection are entitled to seek employment or start their own businesses and trades and gain access to education and training.
Data Selection and Collection
Identifying refugees who conduct business or are planning to launch a business in the near future is a challenging task for investigators in Europe. On one side, since the distinction between refugees and migrants is neither determined by business types nor names but by legal status, it is nearly impossible to determine from basic business information whether or not business owners are refugees. Therefore, investigators must collaborate with gatekeepers, such as refugee support organizations, to reach the target group. On the other side, refugees can be reluctant to provide their business information to researchers, as many refugees do not feel comfortable being labeled as refugees. Furthermore, refugees occasionally have concerns about the disclosure of their business or personal information due to possible (unintended) legal violations, information leaks to potential competitors, and fear for the physical safety of themselves and their families, for instance when their home country authorities consider them to be political offenders. Due to these difficulties in finding interviewees who were willing to share their experiences as refugees and entrepreneurs, we aimed to collect data that provided first insights into enterprising refugees in Europe and identified patterns of opportunity formation. Therefore, our samples, which consisted of 50 respondents, were not meant to represent refugee entrepreneurs in Germany, France, and Ireland. Instead, we used a purposeful sampling method by selecting entrepreneurs with diverse backgrounds and business ideas to consider the heterogeneity of refugee entrepreneurship.
The respondents for this study were either asylum seekers or refugees who were in the early stages of starting a business or had recently launched a business. While a majority of respondents in Germany and France belonged to the recent refugee waves from Syria, Afghanistan, and Iran, the majority of interviewees in Ireland arrived before the mid-2000s. This was due to the number of asylum seekers and refugees being comparably small and the economic integration process taking significantly longer in Ireland compared to Germany and France. This study considered refugee support providers to be an intermediate method of identifying respondents. Four support providers, which were part of the project consortium, joined the data collection process and contacted their project participants with refugee backgrounds.
We developed an interview guide that consisted of both closed- and open-ended questions. The first part of the interview consisted of primarily closed-ended questions dealing with the demographic, educational, vocational, and migration background of the respondent. The second part was explorative with open-ended questions, which allowed respondents to explain their relationships to their home and host countries, as well as to their ethnic or refugee communities and transnational diaspora networks, reflecting their experiences with host-country institutions and their entrepreneurial ideas and aspirations. The final part of the interview consisted of narrowly focused questions where interviewers asked respondents for their knowledge on several aspects of their host-country institutions that were critically relevant to the entrepreneurial process. The authors developed their understanding of administrative procedures for refugees to register and conduct business and developed their understanding of the support infrastructure in each country based on discussions with the above-mentioned refugee service providers. The authors further identified relevant organizations and actors for the entrepreneurial activities of refugees. Since managers had already established a trust relationship with the program participants, managers from the refugee support providers conducted interviews after the authors organized a workshop for them about interview techniques. The authors attended several of the interviews to ensure high interview quality.
Data collection occurred in the spring of 2018 in face-to-face settings or video chat. The duration of interviews ranged from 40 to 80 minutes, and respondents could select the language of the conversation (German, French, or English). All the interviews were recorded and transcribed in the original interview language, and the non-English interviews were translated into English by the authors. For the sake of privacy, this study anonymized the respondents. Table 1 presents a list of respondents.
Data Analysis and Quality Assurance
This study abductively analyzed the transcribed interviews in four steps. Firstly, using MAXQDA, one author paraphrased all the quotes of respondents that were relevant to the following: refugee human capital as entrepreneurial agents, multiple embeddedness, and opportunities. This process is similar to the idea of initial coding in constructivist’s grounded theory approach (Charmaz 2008, 2014), as it aims to reduce the complexity and amount of information while ensuring that the paraphrased codes remain close to the raw data without applying the analytical lens of investigators. This process generated 2,369 paraphrases. Secondly, the authors conceptualized multiple embeddedness by extending the idea of mixed embeddedness (Kloosterman et al. 1999) and developed a visual tool that allowed for the analysis of the complicated institutional settings of refugees as entrepreneurial agents. Thirdly, one author categorized the paraphrased codes into the following categories derived deductively from the literature: human capital, multiple embeddedness (in the mainstream society, homeland, ethnic community, refugee community, and transnational contexts), and entrepreneurial opportunities. Fourthly, the authors analyzed patterns regarding the mixture of multiple embeddedness and derived six types of interplay between the opportunity structure emerging from the embeddedness mix and entrepreneurial agency: (i) value creation with homeland resources; (ii) transnational middleman minority; (iii) integration facilitation; (iv) qualification transfer; (v) solving homeland problems; and (vi) creative innovation.
In order to ensure methodological rigor, this study conducted investigator triangulation (Baxter and Jack 2008; Denzin and Lincoln 2000) by discussing the progress of data analysis in each step. This process was particularly crucial since data collection occurred in three different countries. Authors from each country examined the data and explained the institutional environment of refugee entrepreneurs in the country. Furthermore, the authors presented the research progress at an early stage to refugee support organizations that provided critical feedback to the data interpretation of investigators. Notably, one author was from outside the EU, which helped the author team to understand the perspective of respondents with migration backgrounds.
Empirical Insights of Refugees’ Multiple Embeddedness
This section presents the empirical insights of the multiple embeddedness of interviewed refugee entrepreneurs by elaborating on both the similarities and differences regarding the mixture of embeddedness among respondents.
Firstly, interviewed entrepreneurs were generally substantially disconnected from their home-country contexts, mainly due to political or safety concerns that did not allow them to physically return home. Not being able to return home forced several refugees to drastically change their life orientations and circumstances:
In 2014, I was in a crisis about my future in France. Before coming, my whole life was politics. I knew I wanted to become president in my country. That is why, in the first year in France, I chose small jobs and decided to wait until I come back to Iran. But then, I realized I could not go back. The decision was necessary, and painful, to give up on my political career. (…) In France, I am the same person with nothing. (F-7)
We observed that homeland disembeddedness influenced refugees’ entrepreneurial activities in different ways. Firstly, it affected resource availability in a refugee’s home country since several refugees lost their properties and loved ones while others lost access to resources that continued to exist but were inaccessible for immediate use. For instance, several entrepreneurs could not use their saving since the homeland authority blocked their assets for political reasons (F-13, F-20). Others could not access their own bank accounts or transfer money to their host countries (F-12, G-14). Secondly, the loss of resources, assets, and loved ones in their home countries influenced refugees’ attitudes toward risks, as represented by the following interviewee quotes: “We have nothing to lose because we have lost everything as refugees” (F-18). “I have lost everything in my home, family and everything, so they are all gone. I have lost everything; that is why I am not scared.” (G-4). These quotes indicated that detachment from their home countries strengthened refugees’ risk-taking behaviors and entrepreneurial intentions.
Secondly, the host-country embeddedness of refugees potentially consisted of four sub-contexts: (i) mainstream community, (ii) refugee support environment, (iii) ethnic community, and (iv) refugee community. The interviews revealed that refugee entrepreneurs generally faced significant institutional barriers due to their newness and foreignness to their host-country contexts.
In terms of significant institutional barriers, firstly, respondents perceived that their legal and social status as refugees negatively affected their entrepreneurial activities. On the one hand, respondents experienced that individuals in the mainstream community generally did not believe in the capacity of refugees, which made it difficult for them to maintain their confidence or convince locals of their quality as entrepreneurs or business partners. On the other hand, the legal status of refugees or asylum seekers created constraints in numerous aspects. A female entrepreneur from Malawi who spent more than seven years in Ireland revealed her frustration about legal limitations: “I am still an asylum seeker, so many things in Irish context of law, there are so many things I cannot do as an asylum seeker” (I-4).
Secondly, to a certain degree, refugees were disembedded from their previous networks in their home countries and were new to their host societies, which necessitated the re-establishment of social capital. It was a challenge for many refugee entrepreneurs to build business networks: “I do not know many contractors. I do not know any architects, no engineers” (G-20). In the case of G-20, he knew which types of participants his business needed. In contrast, several refugees did not know who the appropriate individuals for their businesses were: “The challenge is having access to the right people. Whom do I need to know? What do I need to do for meeting these people?” (I-8).
Thirdly, institutional differences between the home and host countries posed particular and considerable challenges for refugees, as they had limited language capacities (particularly in Germany and France); a lack of knowledge about culture, customers, and markets; confusion regarding the highly bureaucratic procedure for self-employment and requirements for dealing with numerous regulations that did not exist in their home countries: “Language is an obstacle. For instance, I do not understand all the financial terms. I have difficulties in speaking with a bank because they sputter by using many financial terms and numbers” (F-10).
While respondents were commonly under-embedded in the mainstream context of their host countries, they were generally well-embedded or perhaps over-embedded in their refugee support environments. Unlike formal institutions, refugee support organizations understood the situations of refugees and supported refugees both professionally and emotionally. Support organizations connected refugees to mainstream markets (F-17, G-19), provided initial working experiences in host countries (G-9, I-7), and continuously motivated refugees’ entrepreneurial activities (F-19). However, empirical data suggested that several refugee entrepreneurs were over-embedded in single support organization contexts. Many respondents emphasized that they received nearly all the necessary information about entrepreneurship from one organization (F-5, F-12, F-19, G-14) and that they could not rely on other organizations or individuals (G-13, G-18): “Only XXX (the name of NGO) helps me. I do not talk much about my project outside” (F-1). Notably, the majority of respondents were not aware of other support organizations or initiatives and did not proactively search for them.
In their host countries, refugees could be embedded not only in mainstream markets and support environments but also in ethnic and refugee contexts. While scholars generally agree that migrant entrepreneurs, who are not forcibly displaced, frequently rely on ethnic networks in host countries (cf. Bunse 2019; Deakins et al. 2007; Ojo 2012; Wilson and Martin 1982), the interviewed refugee entrepreneurs did not demonstrate significant embeddedness in ethnic communities. Respondents frequently named family members and close friends as emotional supporters, occasionally specifically targeted ethnic groups with the same or similar backgrounds to potential customers (G-13, I-5, I-10), or received support from specific community members. For instance, in the case of F-19, a priest from Congo facilitated an opportunity for his exhibition, and an Iranian professor at a local German university helped the entrepreneurial activities of G-19. Nevertheless, this study did not observe either significant behaviors of entrepreneurs to proactively rely on ethnic networks or substantial contributions from ethnic communities to refugee entrepreneur businesses. In fact, many respondents explicitly mentioned that they did not receive support from their ethnic communities (G-1, G-14, I-1, I-2, I-3, I-5, I-7, I-9). Entrepreneurs G-1, G-9, and G-13 shared their confusion that their ethnic communities were not only not supportive but further discouraged them by criticizing their ideas or providing false information. Similarly, F-1 explained another reason to not rely on his ethnic network: “I have never talked about my business to other Iranians. I want to change my life and enter the French society” (F-1). These pieces of evidence may indicate that refugees are less embedded in the ethnic community than migrants.
Similar to ethnic-community embeddedness, none of our respondents reported significant support from refugee communities, which could be explained by the fact that other refugees faced resource constraints and institutional barriers themselves and could not help others. Interestingly, however, refugee communities played an essential role in the businesses of several interviewees since they mainly targeted refugees as a target market for their businesses. For instance, F-9 was passionate about connecting refugees to fashion, and I-8 wanted to develop a music label to ensure that refugees could express themselves. Due to experiencing hardship in host-country integration as refugees, several entrepreneurs decided to create social businesses to bridge refugee communities and locals to facilitate an improved integration process.
Finally, the data showed that several entrepreneurs were not only embedded in their home and host countries but also embedded in transnational contexts. Several entrepreneurs had studied or worked in states neighboring their homelands: For instance, F-19 was from Rwanda but spoke Swahili since he worked in Congo; G-1 was from Syria but had networks in Yemen and Saudi Arabia where he studied; G-3, another Syrian entrepreneur, had a Palestinian investor living in Istanbul for his previous business; G-12, who was originally from Congo, had travelled around Africa while he worked for a South African company. The data additionally suggested that refugees built transnational networks through not only previous education and vocation but also their evacuations across borders. Entrepreneur G-6, for instance, worked in Turkey and Saudi Arabia after he emigrated in 2010 and before arriving in Germany in 2015, which allowed him to build his network and knowledge about the Turkish and Audi Arabian contexts. Similarly, I-7 first travelled to Malta, where he worked as a cultural mediator before arriving in Ireland. Transnational embeddedness was a source for refugees to gain resources, which were useful to their businesses since refugees frequently did not lose transnational ties although forcible displacement disembedded them from their homeland contexts.
Multiple Embeddedness and Opportunity Creation of Refugee Entrepreneurs
As discussed above, scholars in migration entrepreneurship commonly understand that entrepreneurial opportunity emerges as a structure in migrants’ mixed embeddedness (cf. Kloosterman et al. 1999) but neglect the proactive actions of entrepreneurial agents, who construct opportunities by mobilizing resources. Our interviews with 50 refugee entrepreneurs in Germany, France, and Ireland illuminated the interaction between a structure emerging from refugees’ multiple embeddedness and refugees’ opportunity construction behaviors. By contrasting different types of opportunities that refugee entrepreneurs pursued and their embedded contexts, this study identified six patterns of entrepreneurial opportunities constructed by refugees in their multiple embeddedness: (i) value creation with homeland resources; (ii) transnational middleman minority; (iii) integration facilitation, (iv) qualification transfer, (v) solving homeland problems, and (vi) creative innovation. Fig. 2 visualizes these six patterns.
Type 1: Value Creation with Homeland Resources
The first type of identified opportunity was the creation of entrepreneurial value by mobilizing homeland resources. Entrepreneurs G-4, G-6, G-8, G-19, G-11, G-16, F-1, F-3, F-13, and F-16 were in this category. Interestingly, six cases in Germany were related to the food industry, such as a falafel takeaway service (G-4), street food and snack bars (G-6, G-9, G-10, G-16), and a party catering service (G-11), while French cases entailed not only food-related but also cultural components, for example, developing online media about Iran (F-13) and a platform for contemporary arts (F-19). What these entrepreneurs had in common was the fact that they attempted to create entrepreneurial value with their homeland resources.
The entrepreneurs who pursued this type of entrepreneurial opportunity shared similar patterns regarding their multiple embeddedness, as depicted in Fig. 2. Of note, none of these entrepreneurs had vocational or entrepreneurial experience in the same field as the opportunities that they pursued. this observation could be attributed to the fact that they could neither transfer their vocational qualifications to their host countries nor apply their previous working experiences. Entrepreneur F-3, a Jordanian entrepreneur who used to work in tourism, decided to sell Jordanian tea in France. Entrepreneur G-11, who used to work as a driving instructor in Iraq, pursued an idea to open a party catering food in Germany. The primary reason for such radical career shifts was homeland disembeddedness at the regulatory level:
“I am an accountant by profession. I have to do until C-1 (the second-highest level of German language certificate), then study for two years or three and a half years in college, then I can work with my certificate in Germany. That is too much for me. And I like cooking. That is why I have this idea, and I would like to open a takeaway.” (G-4)
Realizing the high barrier to transfer qualifications and experience to new institutional environments and to find suitable jobs in their host countries for their skills, refugees perceived entrepreneurship as an alternative career path. Disembeddedness does not lead to the loss of all resources, and some human capital and tacit knowledge remain (cf. Williams and Shepherd 2016). These remaining resources were not available to all, as resource mobilization required refugees to reinterpret the value of their tacit knowledge from the perspectives of their host societies or ethnic communities. When refugees considered how they could create entrepreneurial value, they reinterpreted that their tacit knowledge about their cultures and languages, which were more or less possessed by everyone in their home countries, had different meaning and value to their host societies.
However, refugees’ tacit knowledge could only be transformed into entrepreneurial value when they were well-embedded in their host societies and, perhaps, their ethnic communities as well. Entrepreneurs had to be legally embedded in their host countries to conduct economic activities as entrepreneurs. Furthermore, it was a critical capability of entrepreneurial agents to understand the demand of customers in mainstream society or ethnic communities and combine their tacit knowledge to create idiosyncratic entrepreneurial value. This required proactive action and attitudes from entrepreneurs, such as testing and validating ideas with potential customers (G-6), asking refugee support organizations for their opinions (G-8, F-1), passion for their ideas (“I had this idea since a long time ago – bringing something related to my culture and sharing it with French people.” F-3), and strong entrepreneurial motivations (“It was my dream [to become an entrepreneur], so why not?” G-16).
Type 2: Transnational Middleman Minority
The second opportunity type had similarities to the “middleman minority” (Bonacich 1973), which refers to the group of migrants who play the role of middleman between different types of actors, particularly between home and host countries. Middleman minority entrepreneurial activities aim to connect the interest of individuals in two different locations by leveraging institutional knowledge from both home and host countries. Among our respondents, Entrepreneurs F-7, F-12, F-15, F-20, G-1, G-5, G-12, G-18, I-7, and I-10 were categorized into this group. The most classic type of middleman activity was trading: Entrepreneurs F-12 (saffron), F-20 (essential oil), I-7 (fair-trade coffee), I-10 (West African goods and clothing) imported products from their home countries or their home countries’ neighboring countries, while Entrepreneurs G-1 (sewing machines), G-5 (car batteries), G-12 (automobile parts), and G-18 (automobiles) exported products produced in their host countries to their home countries or their home countries’ neighboring countries. Two respondents engaged in middleman activities that were unrelated to trade: Entrepreneur F-7 facilitated investment from Europe to Iran, and Entrepreneur F-15 organized tours for Arab tourists.
As visualized in Fig. 2, entrepreneurs who belonged to the middleman minority group were required to have a balanced mixture of embeddedness in their home and host countries as well transnational contexts to play the role of the middleman. Unlike migrants, however, refugees were characterized by their disconnectedness to their homelands. Notably, several entrepreneurs observed in this study overcame their homeland disembeddedness by targeting the countries neighboring their home countries, as these neighboring countries shared language or similar institutional environments. In other words, middleman minority businesses required entrepreneurs to have a certain degree of transnational embeddedness. Entrepreneur G-1 was originally from Syria but additionally embedded in Saudi Arabian contexts where he spent 12 years, which enabled him to import Saffron from Saudi Arabia. I-10, who had a retailing business for West African products, imported products not from his country of origin but from other neighboring African countries. G-12, a Congolese entrepreneur, selected Nigeria as a target market based on his previous international vocational experience:
“I worked for one South African company, in Port Elizabeth in South Africa, and Nigeria also. And I have been around some of the African countries because it was a huge cigarette company, and it was for me a chance to visit many, many markets. And the market where I am planning to do my business is in Nigeria.” (G-12)
In contrast, F-20, a Syrian entrepreneur, selected his market due to the resources of his wife, as her family had a large plant in her home country. His business was the production and sales of essential oil products in Morocco, which met the French legal standard. This example further showed that the entrepreneur’s understanding of the French market played a vital role in conducting business as a middleman.
Another notable fact was that all the refugee entrepreneurs in Germany decided to export German industrial products, while the entrepreneurs in France and Ireland imported products from their home regions. This could possibly be attributed to differences in the attractiveness of products made in the refugees’ host countries compared to their home countries. This data implied that entrepreneurial agents compared the value of home-country products to their host markets, and vice versa, and decided on the option that would allow them to take advantage of institutional gaps as middleman traders.
Type 3: Integration Facilitation
The third opportunity type dealt with social entrepreneurial opportunities that aimed to facilitate the integration process of refugees. Entrepreneurs F-1, F-8, F-9, F-11, F-16, F-18, I-3, I-4, and I-8 were classified into this category. Several entrepreneurial refugees organized occasions, such as workshops (F-8), sports activities (F-16), cultural museum (F-18), and food tables (I-4), in which refugees could interact with local individuals and represent their stories or cultures. Other entrepreneurial refugees facilitated volunteering or job opportunities in which refugees could offer their human capital, such as cultural knowledge (F-1), textile design (F-9), linguistic capacity (I-3), and musical talent (I-8). With the development of a digital platform for illiterate adult migrants, F-11 was the only entrepreneur whose primary aim was not to connect two different communities but to focus on the development of refugees’ integration capacities.
The motivation of the entrepreneurs who sought this opportunity type was to connect refugee communities and mainstream host societies based on their own experiences as refugees:
“The other motivation for me to start this business is based on my own experience when I first arrived. I want to provide a better service.” (I-3)
“I am an asylum seeker. When you arrive in Ireland, they keep you in a situation called Direct Provision (DP). So, the DP is a system that cares for asylum seekers while your case is processed. (…) You get provisions. That means everything is catered; so, you do not do anything for yourself. You are not allowed to work. You are not allowed to go to school. You are not allowed to partake in any other program that will allow you to integrate into the community (…) You are not allowed to cook; so, food is being catered. So, for living there for such a long time, you are disconnected from your cultural ties. (…) People lose self-esteem and confidence.” (I-4)
Entrepreneur I-3’s quote indicated his experience as a refugee not only provided motivation for his entrepreneurial activity but also entrepreneurial resources, allowing him to realize the improvement potential of the integration program. Entrepreneur I-4, an entrepreneur from Malawi, developed her frustration due to disconnectedness from both her home and host countries during Direct Provision, which influenced her becoming a social entrepreneur. The entrepreneurs in this category were mainly embedded in the mainstream markets and refugee communities, and their (dis)embeddedness in other contexts did not play a significant role in their businesses. As their motivation stemmed from their experiences as refugees and asylum seekers, these entrepreneurs tended to focus on their refugee communities in general rather than on their particular ethnic groups. This group of entrepreneurs demonstrated a high level of willingness to solve societal problems, which allowed them to leverage their embeddedness in their refugee communities and proactively develop their mainstream embeddedness.
Type 4: Qualification Transfer
For the fourth type of entrepreneurial value-creation opportunity, refugee entrepreneurs transferred their qualifications from their home countries to their host countries to start businesses. Entrepreneurs F-2, F-4, F-14, G-2, G-13, G-14, G-20, I-5, I-6, and I-9 could be placed in this category. A majority of these entrepreneurs transferred their tacit knowledge, such as industry and metal recycling experience (F-2), knowledge of a particular disease as a medical specialist (F-4), design and tailoring experience (F-9, I-9), real estate business experience (G-2), and experience as a barber (I-6). Since their vocational experiences in these cases were not necessarily related to official qualifications specific to their host countries, the respondents could apply these experiences to new institutional environments. In the cases of G-14 (goldsmith) and G-20 (drywall construction), the host countries’ formal institutions (for example, the Chamber of Crafts) officially recognized their home-country qualifications.
It was a natural motivation for refugees to continue their professions in new locations:
“I have too much experience as a goldsmith. Why should I do different work? I am now 44 years old. And then – yes, you can start another work, a new work, but why? I can now work as a goldsmith.” (G-14)
“I studied Psychiatry Nursery and worked as a psychiatric nursery in Rwanda. (…) It is very complicated to let the French authority to recognize my diploma. But I still want to help people in the medical field even when I cannot work as a nurse.” (F-4)
“I am a professional seamstress fashion designer. I have been working in this field for almost all my life. When I was 12 years old, I started it as a hobby, but then it became my profession. (…) I do this business because it is my passion, and I cannot do other than fashion.” (I-9)
The case of F-4 showed that although she could not transfer her official qualification to the host country, she then attempted to use her academic knowledge and vocational experience to develop a business idea. The entrepreneurs who created entrepreneurial value with their qualifications, which they had acquired in their home countries, needed to identify whether or not their human capital was transferable to their host countries. They were disembedded from their home countries, but this disembeddedness did not deactivate all of their resources (cf. Williams and Shepherd 2016). Entrepreneurs needed to be embedded in mainstream society to legally legitimize their businesses as well as understand the demands of their host countries to analyze business opportunities or to adapt their business ideas, as G-20 did by validating market potential online. When they realized that qualification transfer was impossible due to institutional barriers, they possibly searched for other entrepreneurial opportunities, such as value creation with homeland resources (Type 1) and middleman minority activity (Type 2).
The transfer of home-country qualification occurred beyond the regulatory level. Entrepreneurs faced barriers in the languages, cultures, and markets of host countries. For instance, including when they had industry knowledge, their knowledge was not automatically applicable if entrepreneurs were unfamiliar with industry-specific technical terms in the host-countries’ languages. As a result, entrepreneurs needed to judge the potential impact of institutional differences on their qualifications and construct entrepreneurial opportunities in which they could apply their qualifications while fulfilling market demand in the host countries.
Type 5: Solving Homeland Problems
Similar to integration facilitation (Type 3), the fifth type of value-creation opportunity, homeland-problem solving, had a prominent social entrepreneurial character. While Type 3 aimed to solve the problems related to refugees in their host countries, Type 5 dealt with issues in home countries. The entrepreneurial motivation of the refugees who were in this category was comparable to diaspora philanthropy (Dhesi 2010; Newland et al. 2010). This study identified cases F-6 (awareness campaign about the forced marriage and dowry system in Sudan), F-17 (cultural mediation of African freedom), G-7 (women empowerment through work at home), and G-9 (smartcard development for emergency cases) as entrepreneurs who sought to develop solutions to problems that were common in their home countries. These entrepreneurs shared the characteristic of suffering from these problems, which they attempted to solve on their own:
“This idea came from personal experience. When I was five, I realized that I had no idea how to talk about it [forced marriage] or where to go to earn the right to have my voice heard. As of today, I want to give people opportunities to talk about those cultural traditions that have the potential to truly break women’s lives in South Sudan because I did not have this chance when I was younger. This project is my way of sharing my past experiences to make things change regarding such traditions.” (F-6)
Similarly, G-7’s ex-husband did not provide money to the family, and she needed to work at home to feed her children. G-9 encountered several situations related to kidnapping in her home country, which drove her to develop a technical emergency notification device to signal to others. Interestingly, this study observed that the disembeddedness from homeland contexts enabled these entrepreneurs to objectively reflect on their situations from the outside, situations that they may have taken for granted as a part of traditions and customs. The new embeddedness in their host-countries mainstream contexts allowed these entrepreneurs to contrast two different institutional environments.
Type 6: Creative Innovation
The final category for entrepreneurial value creation – creative innovation – was different from all the other types presented above in the respect that entrepreneurs did not construct opportunities in multiple embeddedness but in a single context of the mainstream markets in their host countries. Their entrepreneurial opportunities were characterized by a high degree of creativity and innovativeness. Among the examined entrepreneurs, F-10 (innovative tourism agency with virtual reality), G-3 (cost-effective solution for children’s safety), G-15 (coach and matching for singles), and G-17 and G-19 (art education for kids) were in this category. The entrepreneurial activities of this group were solely related to their host-countries’ mainstream contexts, and the data did not indicate any significant role of entrepreneurial embeddedness in multiple settings. The entrepreneurs neither used their homeland resources as integral parts of their business ideas nor targeted the ethnic groups or individuals in their home countries as customers or business partners.
What these entrepreneurs had in common was substantial human capital that was applicable to the global market. For instance, F-10 acquired a master’s degree in management and urbanism and worked as an architectural urbanist in their home country. G-3 had a master’s degree in advanced analytics and data science and worked at local startups in Germany. G-15 completed a Master of Business Administration focused on entrepreneurship, and G-18 had a master’s degree in the arts. G-19 did not attend university, as he immediately started working after finishing school, but he had worked in the animation and movie industry for 17 years. These skills were applicable regardless of the context and did not require any official transfer of qualifications. This study additionally observed that these entrepreneurs possessed not only borderless human capital but also the entrepreneurial capacity to identify the demand in the host market and uniquely apply their human capital to construct innovative opportunities.
Empirical evidence from this group of entrepreneurs suggested that the multiple embeddedness of refugees did not play a significant role in their entrepreneurial activities when they possessed globally applicable human capital, such as information technology and engineering, and could transform their human capital into entrepreneurial value in their host countries. However, they needed to be embedded in their host countries to legalize their businesses and understand their markets. Under-embeddedness in their host-country environments caused challenges for this group specific to refugee legal status or a lack of institutional knowledge.
Discussions and Conclusions
Research Contributions
While, in recent years, scholars have started investigating refugees as distinctive entrepreneurial agents who generate socio-economic value, the literature on refugee entrepreneurship suffers from the fragmentation of previous research findings, which has been mainly attributed to the fact that refugees have heterogeneous backgrounds. Their economic activities are highly context-specific (Heilbrunn et al. 2019). Tackling this challenge, this study applied and extended the concept of embeddedness (Granovetter 1985) to break down the complexity of this phenomenon. More specifically, we extended the concept of mixed embeddedness (Kloosterman et al. 1999), which has been applied to various contexts of migrant entrepreneurship studies, by illuminating the weakness of the concept: The concept overemphasizes entrepreneurial opportunities as structure and neglects the role of entrepreneurial agency. By contrasting refugees with other types of migrants, we conceptualized the multiple embeddedness of refugees into three primary contexts: (i) home-country contexts, (ii) host-country contexts, and (iii) transnational contexts. In our study, refugees generally shared the commonality of being disembedded from their home-country institutions to a certain degree while being foreign and new to their host-country environments. However, individual refugees had a different balance of this multiple embeddedness depending on the situation. We advocate that refugees’ various compositions of multiple embeddedness and entrepreneurial activities mutually influence each other.
The analysis of 50 interviews with refugee entrepreneurs in Germany, France, and Ireland resulted in the identification of six patterns in which refugees’ multiple embeddedness and their actions as entrepreneurial agencies interacted to develop entrepreneurial opportunities: (i) value creation with homeland resources, (ii) acting as transnational middleman minorities, (iii) integration facilitation, (iv) qualification transfers, (v) solving homeland problems, and (vi) creative innovation.
Refugees’ entrepreneurial activities vary to a large extent depending on the context, for instance, whether the host country is a developed or an emerging country. It is noteworthy that this study investigated the refugees are from emerging countries while pursuing an entrepreneurial career in developed countries. The institutional environments in emerging and developed countries differ to a large extent, which can be both advantages and disadvantages. For instance, refugee entrepreneurs can take advantage of their home country knowledge to create entrepreneurial value or act as middlemen. However, the strong formal institutions in developed countries may lead to the temporal deactivation of their home country resources or qualifications. According to UNHCR (2020), the majority of forcibly displaced individuals evacuate to neighboring countries, which have emerging economies and often similar institutional environments to their home countries. Thus, those who seek refuge in emerging countries are less likely to benefit from the institutional gaps between their home and host countries compared to the sample of this study on one side. On the other side, refugees in emerging countries may encounter fewer institutional barriers in the host country compared to those in developed countries. Furthermore, they are often engaged in informal entrepreneurial activities, which may allow them to maintain their access to their home country resources.
The findings contribute to the literature on refugee entrepreneurship in several ways. Firstly, the empirical data suggests that refugees’ multiple embeddedness determines opportunity structures (cf. Waldinger 1989) to a certain extent, but entrepreneurial agents play essential roles in constructing opportunities with their resources, motivations, and capabilities to identify demand in new environments and develop solutions by (re)interpreting their resources from different institutional perspectives and by combining available resources. Secondly, the findings reveal the effects of refugees’ temporal homeland disembeddedness on their entrepreneurial activities. While the disconnectedness caused by forcible displacement leads to the temporal deactivation or permanent loss of specific property, this study demonstrates that refugees transform their human and social capital for their host countries. When refugees cannot utilize their qualifications due to institutional gaps, they flexibly switch their focus and recognize the value of their homeland resources (Type 1) or leverage their knowledge of two different institutional environments and transnational networks (Type 2). Some entrepreneurs successfully transfer their qualifications and human capital to their host countries (Type 4) or possess globally applicable, substantial human capital (Type 6). Thirdly, this study reveals that refugees act as social entrepreneurial agents with their personal experiences as refugees and a substantial willingness to improve the overall situations related to refugees and asylum seekers in their host countries (Type 3). Furthermore, by being exposed to new institutional environments, refugees can reflect problems in their homeland societies from a new perspective, which may drive them to create social businesses to remotely solve homeland problems (Type 5). Recently, a few studies have shed light on refugees as social entrepreneurial agents (Harima and Freudenberg 2020; Lee 2018). This study contributes to this scholarly conversation by elaborating on the relationship between refugees’ social entrepreneurial motivations and multiple embeddedness.
Furthermore, by extending the idea of mixed embeddedness, this study contributes to the research on entrepreneurship in the context of migration (Kloosterman 2010; Kloosterman et al. 1999). Scholars have criticized mixed embeddedness for considering the institutional contexts only in the host country (Horst 2018; Lin et al. 2019). Other scholars have illuminated the theoretical vagueness and structural deterministic nature of mixed embeddedness (Portes and Sensenbrenner 1993; Sepulveda et al. 2011). This study addresses both of these critical concerns raised in the previous studies by considering multiple contexts in which refugees can be embedded in and by elaborating on the interactions between opportunity structure emerging within the multiple embeddedness, actions and capabilities of refugees as entrepreneurial agencies.
Practical Implications
Our findings offer practical implications to policymakers of countries that receive refugees as these countries face the pressing necessity to facilitate the socio-economic integration of newcomers. There is a prevailing view among policymakers that, out of necessity, entrepreneurship is an alternative vocational path for refugees, and many countries have not acknowledged the entrepreneurial potential of refugees or taken proactive measures to support the sizable numbers of refugees and asylum seekers with entrepreneurial intentions. At the macro level, refugees’ entrepreneurial activities may appear to be the result of labor-market disadvantages, as these refugees necessarily encounter institutional barriers. This one-sided overgeneralizing view of refugee entrepreneurship neglects the heterogeneity of refugees. When examining refugees more closely, however, one can realize that refugees are distinctive entrepreneurial agents who create unique socio-economic value for their host and home countries that frequently cannot be imitated by local entrepreneurs. This study presents that refugees create different types of opportunities by leveraging their resources and institutional gaps between their home and host countries and transnational contexts. We recommend that policymakers understand the entrepreneurial potential of refugees at the micro- and meso- levels by examining the value refugees create through their entrepreneurial activities and developing support for more individual measures for different types of entrepreneurs depending on the opportunity type.
Based on the findings, we additionally suggest the creation of support organizations for refugees’ entrepreneurial activities, such as business incubators and public organizations, while understanding different types of opportunities from the perspective of multiple embeddedness. While such organizations offer significant support for refugees to overcome institutional barriers, to expand their networks, and to acquire essential management and entrepreneurship skills, they tend to target refugees in general. This approach neglects the diversity of refugees’ backgrounds and unavoidably makes it challenging to address the specific needs of refugees who pursue distinctive types of opportunities or have different compositions of multiple embeddedness. This study identified six patterns and found that each type required different embeddedness compositions and entrepreneurial actions. We recommend that support organizations apply these categories to develop more individual support measures and programs.
Lastly but importantly, the findings of this study offer guidance and orientation for asylum seekers and refugees who are interested in developing businesses in host countries. Frequently, refugees and migrants are not fully aware of the fact that they are embedded in multiple contexts and how their unique embeddedness can create both opportunities and barriers. Consequently, refugees are overwhelmed by immediately obvious refugee disadvantages associated with a high degree of uncertainty in fairly new environments and overwhelmed by the lack of institutional information. Refugees do not reflect on the strengths and resources that they can leverage to create idiosyncratic entrepreneurial opportunities. This study demonstrates various ways in which refugees mobilize their resources from different contexts and deal with temporal deactivations and institutional disadvantages.
Limitations and Research Outlook
This study has several limitations. Firstly, since our respondents participated in the business incubation programs at the time of data collection, a majority of them were early-stage entrepreneurs who had not yet registered their businesses. When entrepreneurs register their business and enter the growth phase of their business, they encounter different types of challenges than those at the earlier stage. This study’s findings were primarily based on early-stage refugee entrepreneurs. Therefore, it is outside of this study’s scope to claim whether or not and to what extent the results would differ from the derived categories if this study had considered more advanced refugee entrepreneurs. Furthermore, this study conducted an interview only once per respondent. Therefore, we could not adequately consider the time dimension in which one could have observed how multiple embeddedness can change over time and how such transitions may require specific actions from entrepreneurial agents. As Kloosterman et al. (1999) have suggested, the embeddedness composition of migrants is not static but dynamic, as it changes over time. As time passes, many refugees legally integrate into their host societies, economically, and socially, while their disconnectedness to their home countries can improve. How this dynamic transition of multiple embeddedness can take place and how it influences their entrepreneurial activities or vice versa remain unknown.
Secondly, as a limitation, the sample size of this study was relatively small, which limited the generalizability of the findings. As mentioned in the methodology section, collecting empirical data with refugee entrepreneurs was significantly difficult. Furthermore, our sample consists merely of refugee entrepreneurs who flee from emerging countries to developed countries. As discussed above, individuals who seek refuge in emerging countries may encounter less significant institutional barriers while being less likely to take advantage of the institutional gap. Therefore, this study only aimed to find patterns of refugee entrepreneurial opportunity formation based on initial empirical insights rather than develop a universally applicable typology. That meant that we could not dismiss the possibility that there were further patterns of interaction for entrepreneurial opportunities and refugee entrepreneurial actions apart from the six identified patterns. Furthermore, of note, these six types of entrepreneurial opportunity creation were not mutually exclusive and collectively exhaustive. For instance, refugee entrepreneurs could transfer their homeland qualifications to solve homeland problems (Type 4 + Type 5) or to facilitate refugee integration (Type 3 + Type 4). In other words, these six patterns had blurred boundaries and could overlap with each other. While these six types of entrepreneurial opportunity creation demonstrated how refugees uniquely designed businesses with advantages and disadvantages emerging from their multiple embeddedness, the findings were not sufficiently comprehensive to develop a generalizable typology.
Thirdly, there were substantial institutional distances between the home and host countries of refugees. We conducted interviews in English, German, and French, which were not the mother tongues of a majority of respondents. Conducting an interview for a qualitative study in a foreign language can affect data quality (Chidlow et al. 2014; Welch and Piekkari 2006). Particularly in the cases of respondents in Germany and France, many refugees had arrived a few years before the data collection process and had a somewhat limited capacity to express themselves in German or French. Furthermore, Germany, France, and Ireland had relatively similar institutional distances from the primary home countries of refugees. It was essential to critically acknowledge the potential bias of researchers: By not having a refugee background, investigators could have interpreted refugees’ experiences only from outsider perspectives. However, the principal author had a migration background from outside Europe, which helped this study reduce the interpretation of empirical data from the Western point of view. Furthermore, we applied a member-checking method by sharing tentative findings and data interpretations with the representatives of refugee service providers to receive their feedback. Nevertheless, we should be aware of the potential neglection or distortion of contextualized knowledge (Plakoyiannaki et al. 2019). The literature suggests that the institutional distances between home and host countries determine the challenges that refugees face in their entrepreneurial activities (Alexandre et al. 2019). This study, therefore, offered limited implications about entrepreneurial activities for refugees who were situated in countries whose institutional environments were close to their home countries.
For both future research and delineating the scope of the findings, the limitations of this study were essential. We make suggestions for future research in three primary areas. Firstly, future studies can build on this study by applying the six types of refugee entrepreneurship presented above to investigate different aspects of refugee entrepreneurship, such as social capital, networking behavior, or entrepreneurial motivation. Alternatively, one could additionally focus on a particular type of refugee entrepreneurship, such as Type 3 or Type 5 and investigate the associated social entrepreneurial activities. The categories derived in this study contribute to reducing the heterogeneity of the phenomenon of refugee entrepreneurship.
Secondly, this study investigated refugee entrepreneurs in developed countries while the vast majority of forcibly displaced individuals flees from emerging countries to other emerging countries. The way refugee entrepreneurs create opportunities is expected to be different from the entrepreneurs considered as samples for this research. Thus, we suggest that future researchers investigate the multiple embeddedness of refugee entrepreneurs in emerging countries to examine how their opportunity seeking and creating behaviors differ from this study and which institutional environments influence their opportunities.
Thirdly, we suggest that scholars apply or extend the concept of multiple embeddedness in different contexts of migration entrepreneurship. The world has become increasingly transnational, and the migration phenomenon has become increasingly complex. There are different types of entrepreneurs with migration backgrounds, such as transnational entrepreneurs (Drori et al. 2009; Schäfer and Henn 2018) and second-generation ethnic entrepreneurs (Dang and Harima 2020; Rusinovic 2008). The idea of mixed embeddedness, which mainly considers the mainstream and ethnic markets in host countries, offers limited explanations when migrants are embedded in more contexts than these two or in transnational contexts. Therefore, depending on the research context, it is essential to flexibly consider multiple contexts where entrepreneurial agency can be embedded.
Fourthly, we suggest that future studies overcome the limitations of this study. For instance, examining the multiple embeddedness of refugees or migrant entrepreneurs over time would contribute to understanding the dynamic process of embeddedness transition.
Notes
Asylum seekers are individuals engaged in an institutional procedure in a country where they are foreigners, with the aim of getting the status of refugee. Refugees are people who have successfully obtained the status of refugee, in a country where they are foreigners.
The amount of the ADA depends on family makeup, means and type of accommodation, but is usually considered insufficient to cover every-day life expenses
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Acknowledgments
We would like to appreciate SINGA France, ActNow, the Irish Refugee Council, and SINGA Germany for supporting the data collection for this study.
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Open Access funding enabled and organized by Projekt DEAL. This project is funded by Erasmus+ VIFRE (Virtual Incubators for Refugee Entrepreneurs)
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Harima, A., Periac, F., Murphy, T. et al. Entrepreneurial Opportunities of Refugees in Germany, France, and Ireland: Multiple Embeddedness Framework. Int Entrep Manag J 17, 625–663 (2021). https://doi.org/10.1007/s11365-020-00707-5
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DOI: https://doi.org/10.1007/s11365-020-00707-5