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The low participation of urban migrant entrepreneurs: reasons and perceptions of weak institutional embeddedness

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  • Masurel, E.

    (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics)

  • Nijkamp, P.

Abstract

The present paper addresses the lack of institutional collaboration among urban ethnic (or migrant) firms as a reason for their low innovation profile. This lack is present in various forms of institutional business cooperation, but here we focus in particular on franchising. Such weak collaborative embeddedness is noteworthy, given the fact that franchising offers for small and medium-sized enterprises (SMEs) an important means to compete better. Poor communication, a low chance to be accepted by the external party, and economic market factors appear to be important reasons why ethnic entrepreneurs do not join franchise organizations. The low chance of acceptance is primarily reflected in the entrepreneurs’ perception of their unfavorable market conditions, but in addition there are other reasons for low participation which can be rectified. From our research, general lessons can be derived which are applicable also to other situations in which ethnic entrepreneurs may also be less inclined to join institutional cooperative systems. With these lessons in mind, the competitive and innovative potential of ethnic entrepreneurs can be improved.

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Bibliographic Info

Paper provided by VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics in its series Serie Research Memoranda with number 0040.

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Date of creation: 2009
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Handle: RePEc:dgr:vuarem:2009-40

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Web page: http://www.feweb.vu.nl

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  1. Borooah, Vani K & Hart, Mark, 1999. " Factors Affecting Self-Employment among Indian and Black Caribbean Men in Britain," Small Business Economics, Springer, vol. 13(2), pages 111-29, September.
  2. Israel M. Kirzner, 1997. "Entrepreneurial Discovery and the Competitive Market Process: An Austrian Approach," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 60-85, March.
  3. Hadewijch van Delft & Cees Gorter & Peter Nijkamp, 2000. "In search of ethnic entrepreneurship opportunities in the city: a comparative policy study," Environment and Planning C: Government and Policy, Pion Ltd, London, vol. 18(4), pages 429-451, August.
  4. Stanworth, John & Curran, James, 1999. "Colas, burgers, shakes, and shirkers: Towards a sociological model of franchising in the market economy," Journal of Business Venturing, Elsevier, vol. 14(4), pages 323-344, July.
  5. Michael, Steven C., 2003. "First mover advantage through franchising," Journal of Business Venturing, Elsevier, vol. 18(1), pages 61-80, January.
  6. Jan de Kok & Milan Jansen & Sten Willemsen & Judith van Spronsen, 2003. "Immigrant entrepreneurship in the Netherlands," Scales Research Reports H200304, EIM Business and Policy Research.
  7. Hoy, Frank & Shane, Scott, 1998. "Franchising as an entrepreneurial venture form," Journal of Business Venturing, Elsevier, vol. 13(2), pages 91-94, March.
  8. Ruiz-Vargas, Yolanda, 2000. "Small business financing sources between immigrants and natives in Puerto Rico," The Quarterly Review of Economics and Finance, Elsevier, vol. 40(3), pages 387-399.
  9. Francine Lafontaine, 1992. "Agency Theory and Franchising: Some Empirical Results," RAND Journal of Economics, The RAND Corporation, vol. 23(2), pages 263-283, Summer.
  10. Michael, Steven C., 1996. "To franchise or not to franchise: An analysis of decision rights and organizational form shares," Journal of Business Venturing, Elsevier, vol. 11(1), pages 57-71, January.
  11. Bruderl, Josef & Preisendorfer, Peter, 1998. " Network Support and the Success of Newly Founded Businesses," Small Business Economics, Springer, vol. 10(3), pages 213-25, May.
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