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Social Capital, Geography, and Survival: Gujarati Immigrant Entrepreneurs in the U.S. Lodging Industry

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Listed:
  • Arturs Kalnins

    () (School of Hotel Administration, Cornell University, Statler Hall 454D, Ithaca, New York 14853-6902)

  • Wilbur Chung

    () (R.H. Smith School of Business, University of Maryland, 3417 Van Munching Hall, College Park, Maryland 20742-1815)

Abstract

Immigrant entrepreneurs often rely on their group's local social capital in their new home market to establish and maintain their businesses. In particular, immigrant entrepreneurs with few resources of their own receive help from those possessing more resources. Supporting these arguments using the empirical setting of Gujarati immigrant entrepreneurs in the lodging industry, we find that the likelihood of survival of an immigrant entrepreneur's hotel increases when surrounded by higher counts of branded hotels (representing high-resource establishments) owned by individuals from their ethnic group but is unaffected by unbranded motels (representing low-resource establishments) owned by members of their ethnic group or by branded hotels owned by individuals from other ethnic groups. These results isolate and reinforce the importance of social capital not only for immigrant entrepreneurs but also more generally for any entrepreneurs belonging to ethnic, professional, religious, or social groups.

Suggested Citation

  • Arturs Kalnins & Wilbur Chung, 2006. "Social Capital, Geography, and Survival: Gujarati Immigrant Entrepreneurs in the U.S. Lodging Industry," Management Science, INFORMS, vol. 52(2), pages 233-247, February.
  • Handle: RePEc:inm:ormnsc:v:52:y:2006:i:2:p:233-247
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    File URL: http://dx.doi.org/10.1287/mnsc.1050.0481
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    References listed on IDEAS

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    3. Bruderl, Josef & Preisendorfer, Peter, 1998. "Network Support and the Success of Newly Founded Businesses," Small Business Economics, Springer, vol. 10(3), pages 213-225, May.
    4. George R. Parsons & A. Brett Hauber, 1998. "Spatial Boundaries and Choice Set Definition in a Random Utility Model of Recreation Demand," Land Economics, University of Wisconsin Press, vol. 74(1), pages 32-48.
    5. Paul Ingram & Tal Simons, 2002. "The Transfer of Experience in Groups of Organizations: Implications for Performance and Competition," Management Science, INFORMS, vol. 48(12), pages 1517-1533, December.
    6. Barton H. Hamilton, 2000. "Does Entrepreneurship Pay? An Empirical Analysis of the Returns to Self-Employment," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 604-631, June.
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