The dynamics of limited breaking out: the case of the Arab manufacturing businesses in Israel

This paper investigates the dynamics of breaking out in the Arab manufacturing business sector in Israel. Based on an ethnographic study and in-depth interviews, this paper develops a three-tier model delineating those characteristics that shape the entrepreneurs' response to structural constraints and their respective mode of operation in the context of resource disadvantage. The model demonstrates that the limited break out of ethnic entrepreneurs signifies selective access to the majority market. Through the model, the paper develops a comprehensive conceptual framework that incorporates two different sets of constraints stemming from the nature of the larger market and institutional setting and community characteristics. The limited breaking out can be explained largely by the dynamics of the interrelations among the institutional environment, the local resources, and the entrepreneurs' characteristics. This implies a Janus-face perspective of breaking out, in which the Arab entrepreneurs tend to use their resources both for the maintenance of their local market and for catering to special segments in the majority market that seek relatively cheap prices or specialized products. The paper concludes that the limited breaking out reflects institutional processes that militate against the minority's ability to fully integrate into the majority market.