The nexus of social capital, coping ability and employment creation in African immigrant-owned small businesses

  • 874 Views
  • 138 Downloads

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Immigrant entrepreneurship, like other facets of entrepreneurship, contributes towards a country’s productivity, partly through employment creation. However, the specific factors, in the form of social capital, that lend themselves to this employment creation potential, remain largely unknown. It is against this background that this study sought to determine if the variables of language proficiency and networking ability bear an association with the employment creation ability of African immigrant entrepreneurs.
This quantitative study was executed from a positivism philosophical standpoint. Relying on the population of African immigrants in the small business sector in South Africa, Swaziland and Mozambique, the non-probability sampling techniques of convenience and snowball sampling were used to identify 2,500 participants. Data were collected in a cross-sectional manner, with self-administered questionnaires and an effective 33% response rate was realized.
Findings reveal a statistically significant relationship between language proficiency and employment creation, while that between networking ability and employment creation was not significant. Nonetheless, most of the studied African immigrant entrepreneurs across the countries agreed that language proficiency and networking ability have helped them cope with the rigors of operating their businesses. These findings signal the need for interventions for building language proficiency and networking ability for African immigrant entrepreneurs.

view full abstract hide full abstract
    • Table 1. Gender profile of respondents
    • Table 2. Age groups
    • Table 3. Descriptive statistics for age by country
    • Table 4. Country-specific ANOVA results for the variables of language proficiency (LP) and Networking ability (NA)
    • Table 5. Post-hoc tests for cross-country perceptions of the contributing roles of LP and NA to the coping ability of African immigrant entrepreneurs
    • Table 6. Results of analysis of relationship between independent and dependent variables
    • Abor, J., & Quartey, P. (2010). Issues in SME development in Ghana and South Africa. International Research Journal of Finance and Economics, 39(6), 215-228.
    • Adler, P., & Kwon, S. (2002). Social capital: Prospects for a new concept. Academy of Management Review, 27(1), 17-40.
    • Aldrich, H., & Kim, P. (2007). Small worlds, infinite possibilities? How social networks affect entrepreneurial team formation and search. Strategic Entrepreneurship Journal, 1(1‐2), 147-165.
    • Amuedo-Dorantes, C., & Mundra, K. (2004). Social networks and their impact on the employment and earnings of mexican immigrants (Paper provided by EconWPA in its series Labor and Demography with 0502001).
    • Azmat, F., & Zutshi, A. (2012). Perceptions of corporate social responsibility amongst immigrant entrepreneurs. Social Responsibility Journal, 8(1), 63-76.
    • Basu, A. (2011). From “break out” to “breakthrough”: Successful market strategies of immigrant entrepreneurs in the UK. International Journal of Entrepreneurship, 15, 1-23.
    • Basu, A., & Altinay, E. (2002). The interaction between culture and entrepreneurship in London’s immigrant businesses. International Small Business Journal, 20(4), 371-394.
    • Boisjoly, J., Duncan, G., & Hofferth, S. (1995). Access to social capital. Journal of Family Issues, 16(5), 609-631.
    • Bolino, M., Turnley, W., & Bloodgood, J. (2002). Citizenship behavior and the creation of social capital in organisations. Academy of Management Review, 27(4), 505-522.
    • Bosma, N., Van Praag, M., Thurik, R., & De Wit G. (2004). The Value of Human and Social Capital Investments for the Business Performance of Startups. Small Business Economics, 23(1), 227-236.
    • Bosma, N., Acs, Z.J., Autio, E., Coduras, A., & Levie, J. (2009). Global Entrepreneurship Monitor: 2008 Executive Report. Global Entrepreneurship Monitor.
    • Burke, M., & Segaloe, I. (2003). Umsobomvu Youth Fund. Networking Your Way to Success: A Guide. Self-employment series.
    • Carree, M., & Thurik, A. (2003). The impact of entrepreneurship on economic growth. In Handbook of entrepreneurship research (pp. 437- 471). Springer US.
    • Clark, K., & Drinkwater, S. (2010). Recent trends in minority ethnic entrepreneurship in Britain. International Small Business Journal, 28(2), 136-146.
    • Collins, J. (2008). Immigrant entrepreneurs in Australia: regulations and responses. Migracoes: Journal of the Portugal Immigration Observatory, 3, 49-59.
    • Collins, J., & Shin, J. (2012). Korean Immigrant Entrepreneurs in the Sydney Restaurant Industry. Sydney, UTS Cosmopolitan Civil Societies Research Centre.
    • Cooper, D., & Schindler P. (2011). Business Research Methods (11th ed.). McGraw – Hill International Edition.
    • Crow, G. (2004). Social networks and social exclusion: An overview of the debate. In C. Phillipson, G. Allan & D. Morgan (Eds.), Social Networks and Social Exclusion, Sociological and Policy perspectives (pp. 7-19). Aldershot, U.K.: Ashgate.
    • Crush, J., Williams, V., & Peberdy, S. (2005). Migration in southern Africa. Paper prepared for the Policy Analysis and Research Programme of the Global Commission on International Migration.
    • Curran, J., & Blackburn, R. (2001). Researching the small enterprise. London: Sage publications.
    • Fairlie, R., & Lofstrom, M. (2015). Immigration and entrepreneurship. In B. R. Chiswick & P. W. Miller (Eds.), Handbook on the Economics of International Migration. Elsevier: North Holland.
    • Fairly, R. (2012). Open for business: how immigrants are driving small business creation in the United States. New York: Partnership for a new American economy.
    • Fatoki, O., & Garwe, D. (2010). Obstacles to the Growth of New SMEs in South Africa: A Principal Component Analysis Approach. African Journal of Business Management, 4(5), 729-738.
    • Fatoki, O., & Patwawairi, T. (2012). The motivations and obstacles to immigrant entrepreneurship in South Africa. Journal of Social Science, 32(2), 133-142.
    • Fatoki, O. (2013). The determinants of immigrant entrepreneurs’ growth expectations in South Africa. Journal of Social Science, 37(3), 209-216.
    • Fatoki, O., & Oni, O. (2014). The Networking Behaviour of Immigrant Entrepreneurs in South Africa. Mediterranean Journal of Social Sciences, 5(20), 284-290.
    • Fiscal Policy Institute (2012). Immigrant Small Business Owners. A Significant and Growing Part of the Economy. A Report from the Fiscal Policy Institute’s Immigration Research Initiative.
    • Gebre, L., Maharaj, P., & Pillay, N. (2011). The Experiences of Immigrants in South Africa: A Case Study of Ethiopians in Durban, South Africa. Urban Forum, 22(1), 23-35.
    • Gedajlovic, E., Honig, B., Moore, C., Payne, G., & Wright, M. (2013). Social capital and entrepreneurship: A schema and research agenda. Entrepreneurship Theory and Practice, 37(3), 455-478.
    • Giorgas, D. (2000, July). Community formation and social capital in Australia. Paper presented at 7th Australian Institute of Family Studies Conference, Sydney (25).
    • Global Entrepreneurship Monitor (2012). South African report. Cape Town: University of Cape Town Graduate School of Business, University of Cape Town.
    • Global Entrepreneurship Monitor (2014). South African report. Cape Town: University of Cape Town Graduate School of Business, University of Cape Town.
    • Global Entrepreneurship Monitor (2015). South African report. Cape Town: University of Cape Town Graduate School of Business, University of Cape Town.
    • Greve, A., & Salaff, J. (2005). Social Network Approach to Understand the Ethnic Economy: A Theoretical Discourse. GeoJournal, 64(1), 7-16.
    • Halkias, D., Harkiolakis, N., Abadir, S., Thurman, P., Akrivos, D., & Caracatsanis, S. (2007). Characteristics and business profiles of immigrant-owned small firms: the case of Albanian immigrant entrepreneurs in Greece. International Journal of Business Innovation and Research, 3(4), 382-401.
    • Heilbrunn, S., & Kushnirovich, N. (2008). The impact of policy on immigrant entrepreneurship and businesses practice in Israel. International Journal of Public Sector Management, 21(7), 693-703.
    • Hisrich, R. (2010). International Entrepreneurship. London: Sage Publications.
    • Hisrich, R., & Brush, C. (2009). The woman entrepreneur: Management skills and business problems. Journal of Small Business Management, 22(1), 30-37.
    • Jennings, J. (2013). Immigrant Entrepreneurs: Creating Jobs and Strengthening the US Economy in Growing Industries: Transportation, Food and Building Services: with a Regional View of Massachusetts, New York and Pennsylvania and a Focus on the Green Economy. Immigrant Learning Center.
    • Johannisson, B. (1990). Economies of overview – guiding the external growth of small firms. International Small Business Journal, 9(1), 32-44.
    • Kalitanyi, V., & Visser, K. (2010). African immigrants in South Africa: jobs takers or job creators? South African Journal of Economics and Management Science, 13(4), 376-390.
    • Kamitewoko, E. (2013). Determinants of entrepreneurship success: An examination of Chinese-owned businesses in Congo Brazzaville. Chinese Studies, 2(3), 113-120.
    • Kamwangamalu, N. (2013). Language-in-education policy and planning in Africa’s monolingual kingdoms of Lesotho and Swaziland. Language policies in education: critical issues, 156-169.
    • Khosa, R., & Kalitanyi, V. (2014). Challenges in Operating Micro- Enterprises by African-Foreign Entrepreneures in Cape Town South Africa. Mediterranean Journal of Social Sciences, 5(10), 205-215.
    • Kloosterman, R., & Rath, J. (2002). Working on the fringes. Immigrant businesses, economic integration and informal practices. In Marginalisering eller Integration (pp. 27-38). NUTEK, Stockholm.
    • Kloosterman, R., & Van Der Leun, J. (1999). Just for starters: commercial gentrification by immigrant entrepreneurs in Amsterdam and Rotterdam neighbourhoods. Housing Studies, 14(5), 659-677.
    • Kloosterman, R. (2003). Creating opportunities. Policies aimed at increasing openings for immigrant entrepreneurs in the Netherlands. Entrepreneurship & Regional Development, 15(2), 167-181.
    • Kongolo, M. (2010). Job creation versus job shedding and the role of SMEs in economic development. African Journal Business Management, 4(11), 2288-2299.
    • Leedy, P., & Ormrod, J. (2005). Practical Research: Planning and Design (8th ed.). Upper Saddle River: Pearson.
    • Levent, B., Nijkamp, P., & Sahin, M. (2007). New orientations in ethnic entrepreneurship motivation, goals and strategies of new generation ethnic immigrants. Paper presented at the 7th International Conference on Diversity in Organisations, Communities and Nations.
    • Light, I., & Dana, L. (2013). Boundaries of social capital in entrepreneurship. Entrepreneurship Theory and Practice, 37(3), 603-624.
    • Light, I., & Rosenstein, C. (1995). Race, ethnicity, and entrepreneurship in urban America. Transaction Publishers.
    • Lin, N. (1999). Building a network theory of social capital. Connections, 22(1), 28-51.
    • Locke, E. (1999). Some reservations about social capital. The Academy of Management Review, 24(1), 8-9.
    • Lopes, A. (1998). The language situation in Mozambique. Journal of Multilingual and Multicultural Development, 19(5), 440-486.
    • Mahuteau, S., Piracha, M., Tani, M., & Vaira Lucero, M. (2013). Immigration Policy and Entrepreneurship. International Migration, 52(2), 53-65.
    • Mandviwalla, M., & Watson, R. (2014). Generating Capital from Social Media. MIS Quarterly Executive, 13(2), 97-113.
    • Meyer, D. (2014). Job creation, a mission impossible? The South African case. Mediterranean Journal of Social Sciences, 5(16), 65.
    • Nahapiet, J., & Ghoshal, S. (1998). Social capital, intellectual capital, and the organisational advantage. Academy of management review, 23(2), 242-266.
    • Ndofor, H., & Priem, R. (2011). Immigrant entrepreneurs, the ethnic enclave strategy, and venture performance. Journal of Management, 37(3), 790-818.
    • Nee, V., & Sanders, J. (2001). Understanding the diversity of immigrant incorporation: a forms-of-capital model. Ethnic and Racial Studies, 24(3), 386-411.
    • Oliveira, C. (2008). The determinations of immigrant entrepreneurship strategies in Portugal. Migracoes, 3, 101-128.
    • Payne, G., Moore, C., Griffis, S., & Autry, C. (2011). Multilevel challenges and opportunities in social capital research. Journal of Management, 37(2), 491-520.
    • Radipere, N. (2012). An analysis of local and immigrant entrepreneurship in South African small enterprise sector (Gauteng province) (Doctoral Thesis). University of South Africa.
    • Raijman, R., & Tienda, M. (1999). Immigrants’ socioeconomic progress post-1965: Forging mobility or survival? In C. Hirschman, P. Kasinitz & J. DeWind (Eds.), The Handbook of International Migration: The American Experience (pp. 175- 211). New York: Russell Sage Foundation.
    • Rogerson, C. (1997). International migration, immigrant entrepreneur and South Africa’s small enterprise economy (Southern Africa Migrants Projects: Migration Policy Series, 3). Institute for Democracy in South Africa.
    • Sahin, M., Nijkamp, P., & Levent, T. (2006). Migrant Entrepreneurship from the perspective of Cultural Diversity (Series Research Memoranda, No. 6). VU University, Amsterdam.
    • Sanders, J. M., & Nee, V. (1996). Immigrant self-employment: The family as social capital and the value of human capital. American Sociological Review, 61(2), 231-249.
    • Schuetze, H., & Antecol, H. (2007). Immigration Entrepreneurship and the Venture Start-up Process. In S. Parker (Ed.), The Life Cycle of Entrepreneurial Ventures. International Handbook Series on Entrepreneurship (p. 3). New York.
    • Sequeira, J., & Rasheed, A. (2006). Start-up and Growth of Immigrant Small Businesses: The Impact of Social and Human Capital. Journal of Development Entrepreneurship, 11(4), 357-375.
    • Setati, M., & Adler, J. (2000). Between languages and discourses: Language practices in primary multilingual mathematics classrooms in South Africa. Educational Studies in Mathematics, 43(3), 243-269.
    • Spinelli, S., & Adams, R. (2012). New Venture Creation. Entrepreneurship for the 21st Century (9th ed.). McGraw-Hill International Edition.
    • Statistics South Africa (2017, June). Consumer Price Index (CPI).
    • Tengeh, R. (2013). A business survival framework for African immigrant-owned businesses in the Cape Town Metropolitan area of South Africa. Mediterranean Journal of Social Science, 4(13), 247-260.
    • Timberg, C. (2005). Refugees with hopes, skills find opportunities in South Africa. Washington Post, Foreign Services, A21.
    • Turkina, E., & Thai, M. (2013). Social capital, networks, trust and immigrant entrepreneurship: a cross-country analysis. Journal of Enterprising Communities: People and Places in the Global Economy, 7(2), 108-124.
    • Uzzi, B. (1997). Social structure and competition in interfirm networks: The paradox of embeddedness. Administrative Science Quarterly, 41(1), 35-67.
    • Watt, S., Simpson, C., McKillop, C., & Nunn, V. (2002). Electronic course surveys: does automating feedback and reporting give better results? Assessment & Evaluation in Higher Education, 27(4), 325- 337.
    • Zhou, M. (2007). Non-economic effects of Ethnic Entrepreneurship. In L. P. Dana (Ed.), Handbook of Research on Ethnic Minority Entrepreneurship. Edward Elgar, Northampton.
Related Articles

  • Challenges of small and medium enterprises during the COVID-19 pandemic: Case of Georgia

    Amiran MaglakelidzeORCID , Gulnaz ErkomaishviliORCID doi: http://dx.doi.org/10.21511/ppm.19(4).2021.02
    Problems and Perspectives in Management Volume 19, 2021         Issue #4         pp. 20-28 Views: 3060 Downloads: 1592 TO CITE АНОТАЦІЯ

    The COVID-19 pandemic has had a significant impact on small and medium enterprises (SMEs). The purpose of this study is to assess the impact of the COVID-19 pandemic on SMEs in Georgia, identify the challenges of SMEs in pandemic conditions, and analyze government economic policy measures. For this purpose, 102 small and medium entrepreneurs from different regions of Georgia were interviewed. The survey was conducted by sending a questionnaire through digital channels. The results were processed using data analysis, quantitative and qualitative research methods, and presented graphically. As a result, key challenges and development directions that are typical for SMEs operations in Georgia during the pandemic were identified. For 60.8% of surveyed SME owners, lockdown is the main challenge. Sales volume of 45.1% of SMEs decreased. In addition, 39.3% of the surveyed SME owners increased the innovative capabilities of a company and 37.2% increased the sales volume of a company through digital channels. The main challenge of the pandemic, lockdown, gave impetus to a change in entrepreneurial behavior. In a pandemic, entrepreneurial activity has become more favorable through digital channels. During the pandemic, there is a need to continue the government’s program of tax incentives and subsidies for SMEs. In addition, the government should promote education in the fields of entrepreneurship, innovation, and technology.

  • The impact of COVID-19 pandemic on performance of small enterprises that are e-commerce adopters and non-adopters

    Dirga Lestari , Saida Zainurossalamia ZAORCID , Siti MariaORCID , Wirasmi WardhaniORCID , Rizky YudaruddinORCID doi: http://dx.doi.org/10.21511/ppm.19(3).2021.38
    Problems and Perspectives in Management Volume 19, 2021         Issue #3         pp. 467-477 Views: 2355 Downloads: 1267 TO CITE АНОТАЦІЯ

    Researchers have emphasized the role of e-commerce for small enterprises in improving their performance. However, there is limited evidence on the use of e-commerce by small enterprises, and e-commerce adopters and non-adopters dealing with COVID-19. Therefore, the purpose of this study is to investigate the differences in the impact of COVID-19 on income between small enterprises that are adopters and non-adopters of e-commerce. This study also explored the impact of restrictions on community activities, the intention to adopt e-commerce, and the types of assistance required by small enterprises due to the pandemic. Data were collected through an online questionnaire survey among small enterprises that operate in the culinary field (1,024 small enterprises in Indonesia). The data were analyzed using descriptive analysis, cross-tabulation, and the Mann-Whitney test. This study finds that non-adoption of e-commerce caused small enterprises to experience a decline in income, which worsened due to restrictions of community activities, compared to adopters of e-commerce. Therefore, to overcome this negativity, small enterprises were pushed to adopt e-commerce. Finally, working capital assistance is the main assistance required due to the pandemic both by e-commerce adopters and non-adopters. This study has significant implications for how small enterprises and governments may benefit from e-commerce dealing with extreme disruptions such as the COVID-19 pandemic.

    Acknowledgment
    We are grateful to Mulawarman University for providing us with the funding necessary to gather the necessary data for the study and complete this empirical investigation. We also would like to thank two anonymous reviewers and seminar participants at Mulawarman University for their helpful feedback.

  • Generational links between entrepreneurship, management and puritanism

    Ola Honningdal GryttenORCID Researcher ID, Kjell Bjørn MindeORCID doi: http://dx.doi.org/10.21511/ppm.17(1).2019.21
    Problems and Perspectives in Management Volume 17, 2019         Issue #1         pp. 244-256 Views: 2208 Downloads: 709 TO CITE АНОТАЦІЯ

    This paper deals with relationships between puritanism, management and entrepreneurship. As this is an on-going debate among economic historians, it focuses on the period from the early 1800s until present times, where Norwegian high profile puritan entrepreneurship serves as the case.
    The theoretical framework is that entrepreneurship is seen as an important liaison factor representing multifactor productivity in a Solow growth model. The paper provides new insight within different areas on the basis of utilization of available sources. Firstly, it gives new estimates of the entrepreneurship of the puritan leader, Hans Nielsen Hauge (1771–1824).
    Secondly, it organizes his followers in three generations. The first is those who directly took up his heritage, i.e. Haugeans. Their heydays lasted until the middle of the 19th century. The second generation is characterized as Haugean descendants. These were highly influenced by the movement’s values. They dominated the scene from the late 1800s to the late 1900s. The third generation is called Neo-Haugeans, largely a fruit of the revival of Haugean values during the last decades.
    Thirdly, the paper maps attributes and motivation of this puritan entrepreneurship during generations. The authors conclude that it was guided by high degree of innovation, family ownership, wide portfolios, and continuity, when stewardship seems to be an important motivational factor.

Download Preview
Close
Problems and Perspectives in Management
Problems and Perspectives in Management