Being an entrepreneur: emergence and structuring of two immigrant entrepreneur groups

Abstract

The paper aims to analyse the mechanisms whereby immigrant entrepreneurship emerges and develops. In this connection, we argue that studies of immigrant entrepreneurship can benefit from deeper dialogue with economic sociology. With the idea of mixed embeddedness as our starting point, we advocate an analytical framework of immigrant entrepreneurship that traces the interconnections between the approaches of new economic sociology, political economy and neo-institutionalism from the perspective of mechanism-based explanation. This framework is then applied to a qualitative case study conducted on two micro-immigrant entrepreneur groups: the Italian ice-cream parlour owners and pizzeria owners in Frankfurt am Main, Germany, selected inasmuch as they represent polar forms of immigrant entrepreneurship. In this perspective, empirical findings show detailed differences between the two groups. For pizzeria owners, entrepreneurial transition is the result of a short-term project; the actors are part of small networks, do business in predominantly local markets and are mainly shaped by mimetic isomorphism. By contrast, the ice-cream parlour owners script more consistent entrepreneurial paths, belong to more highly articulated networks, show specific aspects of economic transnationalism and structure themselves by a predominately normative process.

Keywords::

• immigrant entrepreneurs
• embeddedness
• social capital
• transnationalism

Notes

^1. Henceforth, we adopt the term immigrant entrepreneurs – by which we mean immigrants who own businesses with employees – rather than ethnic entrepreneurs. The latter concept, in fact, implies that there is a ‘regular pattern’ of interaction, with shared customs and practices in a given immigrant group situated in a specific context. As many scholars have stated, the question of ethnicity is thus not a given of immigrant entrepreneurship, but is a matter of research (Chaganti and Greene 2002; Koning and Verver 2012). For the purpose of this paper, the ethnic dimension of the investigated entrepreneurs should be operationalized in relation to: (1) the product, i.e. whether it is ethnic or non-ethnic on the basis of the extent to which it is correlated to the entrepreneurs' background; (2) the market, which may be open or consist of an ethnic clientele; and (3) the origin of employees and suppliers (e.g. Rusinovic 2008). With the concept of entrepreneurship, we propose to refer to starting and running a business (van Gelderen and Masurel 2012, 2).

^2. There can be said to be three main approaches in economic sociology: new economic sociology, which takes into account the different kind of relational embeddedness of economic action; political economy, which explores the political regulation of the economic sphere; and neo-institutionalism, which pays attention to cultural embeddedness of economic action, i.e. the role played by informal institutions in shaping economic processes (Swedberg 2007).

^3. In greater detail, analytical sociology is a ‘movement’ (Hedström and Bearman 2009), centring on generative mechanism-based explanation, which holds that in order to explain the emergence of a social phenomenon ‘one should identify the situational mechanisms by which social structures constrain individuals' action […] shape their desires and beliefs, describe the action-formation mechanisms linking individuals' desires and beliefs to their actions and specify the transformational mechanisms by which individuals, through their actions and interactions, generate various intended and unintended social outcomes’ (Hedström and Ylikoski 2010, 58). The core of this approach is its reliance on explanation, rather than a preference for a specific theory or object of study; it has often been applied in recent years to sociological investigations of economic phenomena.

^4. Scholars have devoted growing attention to immigrant entrepreneurship for the last couple of decades, chiefly investigating the pathways taken by immigrants from developing countries and settling in the industrialized West. In this work, Italy has been considered as a country that has attracted increasing numbers of immigrants from abroad, neglecting the situation of the Italians who immigrated from the county from the late 1950s to the early 1970s.

^5. German workers' self-employment rate is 10.9%, while the average for immigrants is around 10% (our calculation using data from Microcensus [2010]). Slightly over 13% of Italian immigrants are self-employed, with a higher-than-average concentration in the restaurant sector (Leicht, Leiss, and Fehrenbach 2005). This is a significant figure, given that ‘Although Italians are not the largest immigrant group in Germany, they have long been the most important nationality with respect to numbers self-employed on a national level’ (Wilpert 2003, 241).

^6. There are around 523,000 Italians currently living in Germany. Of these, slightly over 3% reside in the eastern Länder. The majority of Italian residents are concentrated in the southwestern part of the country and in the Rhineland, the heart of industrial Germany. Approximately 82% of the Italians who have immigrated to Germany live in and around Stuttgart in Baden-Württemberg, in the Munich region in Bavaria, in North Rhine-Westphalia and in Hesse (Statistisches Bundesamt Deutschland 2010; Haug 2011).

^7. Take, for example, the case of the Turks living in Berlin's Kreuzberg district, or the smaller Italian enclave in Mannheim.

^8. The two indexes, whose values range from 0 to 100, were calculated as follows: , where X_i is the ratio of a group located in the i-th area to the total population of that group in the entire city, Y_i is the ratio of the remaining groups located in a certain area to the total of the remaining groups in the entire city and n is the number of urban areas considered. , where X_i is the ratio of a group in the i-th area to the total population of that group in the entire city, Z_i is a ratio similar to X_i for another groups (the native-born, in this case) and K is the number of urban areas considered (see Wong 1998).

^9. The corpus of interviews was analysed in three stages: (1) each interview was segmented, and each segment characterized by theme; (2) interviews and theme were compared; and (3) ideal-typical experiences/tendencies were identified to which each case can be assigned with a greater or lesser degree of similarity. In accordance with this methodological orientation, the following sections will present selected quotes from the interviews that are representative exempla of the ideal-typical tendencies thus identified (Cardano 2011).

^10. This is in line with the reconstruction of the context (see Section 3), which indicated the low spatial density of Italian immigrants in Frankfurt. In the interviews with key informants, moreover, it was found that pizzeria and ice-cream parlour owners did not select the location of their businesses on the basis of a preference for attracting Italian customers. The case studied here thus does not reflect the ‘little Italy’ case encountered in certain cities in the USA, namely a typical enclave, which only in a mature stage may expand into broader markets. In the case examined here, by contrast, the outlet market's target was never restricted to Italian consumers.

^11. By ‘professionalism’, we mean having a high level of skill learned on the job, in some cases strengthened by appropriate training.

^12. Recent years have seen the emergence of other types of ice-cream parlour owners, with a less sophisticated level of professionalism and a more permanent presence in the host country (Storti 2007).

^13. Being able to move freely between the two countries was guaranteed by Italy's membership in the EEC, which gave Italian emigrants a competitive edge over those of other nationalities (Wilpert 2003).

^14. Entry regulations, on the other hand, are not particularly rigid: entrepreneurs intending to start a business are required to have the same permit as pizzeria owners.

^15. Uniteis both trains new ice-cream parlour owners and provides ongoing education services for those who are already in business. By contrast with the Italian restaurateurs' association in Germany, which numbers very few pizzeria owners among its members – none of those we interviewed belonged – a high percentage of ice-cream parlour owners belong to the association, which interacts with both Italian and German institutions (www.uniteis.de).