The Role of Social and Human Capital in the Start-Up and Growth of Immigrant Businesses
Posted: 4 Nov 2009
Date Written: 2004
Abstract
The role played by both strong and weak network ties in the creation and growth of immigrant businesses is investigated.Following a review of the literature on immigrant entrepreneurship, stages of venture development, and the role of networks in immigrant communities, the authors examine the types of ties that are prevalent in the startup and growth of immigrant businesses. While the social capital associated with strong ties provides a closed, protected environment that fosters the successful startup of immigrant businesses, expansion beyond the immigrant enclave requires entrepreneurs to broaden their networks by developing weak ties with individuals and organizations outside the immigrant enclave. As the authors’ conceptual model illustrates, human capital moderates the positive effect of strong ties on startups, as well as the positive effect of weak ties on business growth. The strength of a tie and the impact of that strength on entrepreneurial success may be largely based on the developmental stage of the business.The authors also conclude that social and human capital play equally important roles in the creation and success of immigrant businesses. Further research is needed to clarify such issues as the differences in economic success achieved by different immigrant communities and the international dimension of immigrant economies.(SAA)
Keywords: Strong ties, Weak ties, Firm growth, Immigrant firms, Startups, Immigrants, Social capital, Human capital, Network theory, Immigrant entrepreneurs
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