Theorizing Disembedding and Re-Embedding: Resource Mobilization in Refugee Entrepreneurship

ABSTRACT

Forced displacement drastically changes the nature of refugees’ connection to their home countries and requires them to build new ties to their host countries. While refugees undergo the dynamic transformation of their embeddedness after arriving in host countries, previous studies on refugee entrepreneurship have not sufficiently examined the dynamic and procedural nature of refugees’ embeddedness and its influence on their entrepreneurial activities. This study seeks to understand how the process of embedding influences refugees’ resource mobilization in their entrepreneurial activities. Based on 20 interviews with refugee entrepreneurs in Germany, this study revealed that forced detachment from home-country contexts led to a loss of certain resources while simultaneously creating opportunities for refugees to develop resources by building new connections. This study challenges the conventional structural deterministic approach of mixed embeddedness and theorizes disembedding and re-embedding processes of refugee entrepreneurs. The findings suggest that these processes require a cognitive process on the part of entrepreneurial agents to become aware of a loss of resources and to reinterpret the value of their resources. Furthermore, this paper discusses how these processes constrain and enable refugees’ access to resources. The findings offer implications for policymakers of refugee-hosting countries and refugee support organizations.

KEYWORDS:

• Refugee entrepreneurship
• mixed embeddedness
• disembedding
• re-embedding
• resource mobilization

Introduction

The world currently faces one of the most significant refugee crises in recent history. The United Nations High Commissioner for Refugees (UNHCR) has reported that 79.5 million individuals were forcibly displaced globally in 2019 (UNHCR 2020). In turn, those countries that have unexpectedly received a large number of refugees are facing a pressing need to facilitate the socio-economic integration of newly arrived people into society (Betts, Omata, and Bloom 2017; Sak et al. 2018; Kachkar 2018; Gericke et al. 2018). Significantly, since the mid-2010s, policymakers and academics have started to pay attention to refugees as distinctive entrepreneurial agents who make unique socio-economic contributions to their host countries. Research on refugee entrepreneurship has consequently emerged and grown rapidly over the last few years (Bizri 2017; Heilbrunn, Freiling, and Harima 2019; Shepherd, Philippe Saade, and Wincent 2020; Desai, Naudé, and Stel 2020).

On the one hand, recent scholarly discussions have revealed that refugees face more barriers to their entrepreneurial activities than migrants due to disadvantages caused by forced displacement; for instance, previous studies have outlined a lack of social networks, labour market disadvantage, and legislative barriers as impediments that refugees encounter in their host country (Lyon, Sepulveda, and Syrett 2007; Wauters and Lambrecht 2008; Alrawadieh, Karayilan, and Cetin 2019). On the other hand, several studies have highlighted the entrepreneurial potential of refugees by examining their entrepreneurial resilience (Shepherd, Philippe Saade, and Wincent 2020; Alkhaled 2019), distinctive mobilization of social capital (Bizri 2017), and unique opportunity construction (Harima and Freudenberg 2020, 2020). Together, these prior studies can help us understand both challenges and opportunities of refugee entrepreneurship. Refugees find themselves in a dynamic transition phase in which displacement suddenly severs their connections to their home countries while urging them to build ties in new environments (Şimşek 2018; da Lomba 2010). However, how this dynamic shift of their embeddedness influences refugees’ entrepreneurial activities remains mostly unknown.

In the literature on migration entrepreneurship, the thesis of mixed embeddedness has been frequently applied as a tool to understand the uniqueness of migrant businesses (Kloosterman, van der Leun, and Rath 1999; Kloosterman and Rath 2001). However, while mixed embeddedness supports scholars’ understanding of the duality of migrants concerning their networks in their home and host communities, the concept has been criticized for its structural deterministic nature and its dichotomous division between structure and agency (Sepulveda, Syrett, and Lyon 2011). As such, previous studies have tended to look at entrepreneurial opportunities as structures without fully considering the role of entrepreneurs who construct those opportunities by mobilizing resources (Aldrich and Waldinger 1990; Waldinger 1989; Barrett et al. 2002). Furthermore, scholars have predominantly treated the mixed embeddedness of migrants as a stable state rather than a dynamic process (Barrett, Jones, and David 2001; Price and Chacko 2009; Langevang et al. 2015). In its current form, therefore, mixed embeddedness offers insufficient explanations to examine dynamic interactions between entrepreneurial agents (refugees) and their contexts.

Based on the discussions above, this study seeks to understand the transition of refugees’ embeddedness as a process of embedding that influences the access to resources in their subsequent entrepreneurial activities. The research questions underpinning this study are as follows: (i) how does the embedding process influence refugees’ access to resources in their entrepreneurial activities? and (ii) what individual and environmental factors influence this process? Based on 20 semi-structured interviews with refugee entrepreneurs who have recently arrived in Germany, this study reveals that forced detachment from the initial home-country contexts leads to a loss of certain resources while simultaneously creating opportunities for refugees to build resources by forging new connections.

This study seeks to make theoretical contributions to the research domains of refugee entrepreneurship and (mixed) embeddedness theory. First, by examining interactions between refugee individuals and the multiple contexts in which they are embedded, this study extends the refugee entrepreneurship literature, which has not fully considered the role of refugee entrepreneurs and predominantly treated opportunities and obstacles as being ‘out there’. Second, the findings extend the concept of mixed embeddedness (Kloosterman, van der Leun, and Rath 1999; Kloosterman and Rath 2001) by revealing the refugees’ embeddedness as a dynamic multi-level process that is influenced by institutional, network, and individual cognitive factors. As such, I challenge the conventional static and deterministic approach of mixed embeddedness and theorize disembedding and re-embedding processes of refugee entrepreneurs. The findings demonstrate how the refugees’ embeddedness in multiple contexts changes after a forcible departure from their homeland as well as how their embeddedness transformation constrains and/or enables their access to entrepreneurial resources.

This paper is organized as follows. The following section reviews the literature on refugee entrepreneurship and (mixed) embeddedness. I then outline the conceptual background for the study, followed by a discussion of the methodological approach. Next, I present the findings on how disembedding and re-embedding processes affect refugees’ base of resources. The discussion section then develops a framework of refugees’ disembedding and re-embedding processes as well as a set of research propositions explaining the relationships within the framework. The final section examines how these findings contribute to ongoing scholarly discussions in the field of refugee entrepreneurship and embeddedness, plus practical implications, the limitations of this study, and suggestions for future research.

Conceptual Background

Emergence of Refugee Entrepreneurship Research

Research contributions to understanding refugees’ entrepreneurial activities have mostly been made in the last few years, even though forced displacement has occurred throughout history (Senthanar, Maceachen, and Bigelow 2021; Bizri 2017; Shepherd, Philippe Saade, and Wincent 2020; Alexandre, Salloum, and Alalam 2019; Heilbrunn, Freiling, and Harima 2019; Heilbrunn and Lisa Iannone 2020). Scholars have rarely treated refugees as distinctive entrepreneurial agents in the long research history of migration entrepreneurship (Light 1984; Grey, Rodríguez, and Conrad 2004; Evans 1989; Portes and Jensen 1989). Wauters and Lambrecht (2006, 2008) conducted pioneering studies to understand the distinctiveness of refugees as entrepreneurs when compared to migrants by noting the lack of resources, limited cross-country mobility and jeopardized mental well-being as hindrances to their entrepreneurial activities. Despite their critical viewpoint, however, their contributions only started receiving scholarly attention after the recent global refugee crisis (Desai, Naudé, and Stel 2020).

Refugees must rebuild their lives almost from scratch in a new settlement, having been forcibly disconnected from their home countries, and this situation creates substantial barriers that refugee entrepreneurs encounter. Lyon, Sepulveda, and Syrett (2007) were among the first to investigate the constraints of refugee entrepreneurship, identifying different types of disadvantages: (1) the limited availability of finance and investment; (2) difficulties in marketing and business development; (3) lack of information and advice; and (4) other constraints. Other scholars have frequently cited limited access to financing as a significant obstacle (Wauters and Lambrecht 2008; Easton-Calabria and Omata 2016; Alrawadieh, Karayilan, and Cetin 2019), along with disadvantages related to legislative and administrative issues, socio-cultural differences, language barriers, and hurdles in markets (Alrawadieh, Karayilan, and Cetin 2019; Shneikat and Alrawadieh 2019; Rashid 2018).

While scholars have tended to focus on the disadvantages that refugees face, several studies have also highlighted refugees’ entrepreneurial resources and capacity. Despite extreme adversities, refugee entrepreneurs demonstrate resilience by creating businesses in resource-scarce foreign environments (Shepherd, Philippe Saade, and Wincent 2020; Alkhaled 2019). More specifically, refugees cope with resource deficiencies as entrepreneurial bricoleurs (Heilbrunn 2019; Kwong et al. 2019) and create unique entrepreneurial opportunities by taking advantage of institutional voids and gaps (la Chaux, de, and Haugh 2020; Aki; Harima et al. 2021). For instance, refugees have been seen to demonstrate distinctive networking behaviours compared to migrants or locals: while refugees usually have smaller networks in their host countries, researchers have observed the resourceful mobilization of their networks for entrepreneurial activities in a manner similar to the notion of network bricolage (McKague and Oliver 2016; Kannampuzha and Suoranta 2016). For instance, Bizri (2017) has noted that refugees develop a sense of obligation and responsibility towards co-ethnics by collectively identifying themselves as a pseudo-family.

While previous studies are useful in outlining the advantages and disadvantages of refugee entrepreneurs, their approaches are not without problems. First, refugee entrepreneurship studies have predominantly focused on the contexts of receiving countries; in doing so, they have largely neglected the role of refugees’ home countries, reinforcing the assumption that their home countries play only a marginal role in their entrepreneurial activities. However, even when one cannot return home, homeland connections do not disappear for a long time, and individuals are often emotionally attached and connected to their heritage over generations (Rusinovic 2008; Cohen 2008; Gillespie et al. 1999). Second, opportunities and obstacles tend to be considered as ‘out there’, that is, it is the social structure of the host countries that determines refugees’ advantages and disadvantages without sufficiently considering the role of refugees themselves. Consequently, refugees are viewed as submissive to their surrounding institutions rather than as autonomous entrepreneurial agents. In other words, the literature calls for an examination of the role of refugees’ social relationships with both their home and host countries as parts of their entrepreneurial activities and the ways in which opportunities and obstacles are created through the interaction between entrepreneurial refugees (agents) and the multiple contexts in which they are situated (structure).

Embeddedness of Refugee Entrepreneurs

This paper takes a closer look at embeddedness of refugee entrepreneurs. Embeddedness is a concept originally coined by Karl Polanyi (1944), who saw markets as necessarily limited by institutional regulations. Later, embeddedness gained popularity among scholars in new economic sociology through Granovetter (1985), who argued that economic activity is ‘embedded in concrete, ongoing systems of social relations’ (p. 487). Embeddedness is a multi-faceted concept that considers multiple layers of institutions and examines the cultural, political, structural, and cognitive embeddedness in a society that needs to be coordinated for them to thrive (Beckert 2015). With respect to entrepreneurship, scholars have applied the notion of embeddedness to various contexts, including technology-based firms (Yli-Renko and Autio 1998), family entrepreneurship (Aldrich and Cliff 2003; Kallmuenzer and Peters 2017), social entrepreneurship (Smith and Stevens 2010; Kistruck and Beamish 2010; Christian et al. 2011), professional entrepreneurship (Martin and Richard Goe 2004), and rural entrepreneurship (Kalantaridis and Bika 2006; Korsgaard, Ferguson, and Gaddefors 2015; Korsgaard and Wittorff Tanvig 2015). In these contexts, embeddedness enables entrepreneurs to access resources available within particular social ties (Jack and Anderson 2002; Burt 2000; Wigren-Kristofersen et al. 2019).

In the research on migration entrepreneurship, the concept of embeddedness has played an essential role in understanding the social structure and networks in which entrepreneurs are situated (Portes and Sensenbrenner 1993; Waldinger 1989). For instance, embeddedness in ethnic communities facilitates shared values, trust, reciprocity, and solidarity, making localized resources available to migrant entrepreneurs (Aldrich and Waldinger 1990; Portes and Sensenbrenner 1993). Kloosterman et al. have made noteworthy contributions to understanding entrepreneurial activities of migrants through the lens of embeddedness by developing the thesis of mixed embeddedness (Kloosterman 2010; Kloosterman and Rath 2001; Kloosterman, van der Leun, and Rath 1999). They considered migrants’ entrepreneurial activities as embedded in ethnic networks and the socio-economic and politico-institutional environments of their host countries. In migration entrepreneurship studies, the concept of mixed embeddedness has become a prominent theoretical approach (Ram et al. 2013; Aliaga-Isla and Rialp 2013; Solano 2016; Barberis and Solano 2018); indeed, it has been extended to consider contexts other than the host country and ethnic networks, such as home countries (Lin et al. 2019) and transnational networks (Bagwell 2015; Rusinovic 2008; Solano 2015).

While scholars consider mixed embeddedness useful for examining the idiosyncratic context of migrant entrepreneurs, the literature has also problematized the concept. First, scholarly discussions on mixed embeddedness have tended to consider entrepreneurial opportunities and resource availability as static structures rather than dynamic processes created by entrepreneurial agents (Portes and Sensenbrenner 1993; Kloosterman 2010; Barrett et al. 2002). This tendency is unsurprising since the concept was originally developed in close relation to the notion of opportunity structure (Kloosterman, van der Leun, and Rath 1999; Waldinger, Aldrich, and Ward 1990; Waldinger 1989). Kloosterman, van der Leun, and Rath (1999) originally understood migrant firms at the lower end of the opportunity structure determined by broader institutional contexts at the macro level. While entrepreneurship scholars have acknowledged that resources are embedded within the structure, they have also emphasized the critical role of entrepreneurs who activate these resources through their actions (Jack and Anderson 2002). In discussions on mixed embeddedness, however, the role of migrants as entrepreneurial agents in resource mobilization processes has remained largely unclear. Crucially, Sepulveda, Syrett, and Lyon (2011) have underlined how the mixed embeddedness approach divides structure and agency dichotomously, which ultimately hinders scholars from conceptualizing the mutual interaction of structure and agency.

Second, research has paid limited attention to the processual dimension of mixed embeddedness. While a few recent studies have shed light on the dynamic process of embeddedness of refugee or migrant entrepreneurs to understand their opportunity creation/production (Lassalle and Shaw 2021; Jiang et al. 2021), previous scholars have mostly applied it as a tool to describe the characteristics of migrant businesses (Ram, Theodorakopoulos, and Jones 2008; Solano 2020). Although Kloosterman, van der Leun, and Rath (1999) emphasized that mixed embeddedness is an open, contingent social process, the literature has predominantly considered migrants’ embeddedness as a mere static status that enables migrants to access certain entrepreneurial resources. In reality, migrant integration is a multi-layered dynamic process that is influenced by various micro, meso, and macro factors (Diehl et al. 2016; Ambrosini 2016). As a result, previous studies have failed to understand migrants’ shifting relationship with their home and host countries as a process of embedding.

The embeddedness of refugees is fundamentally different from that of migrants since refugees are considered embedded in neither their home nor host countries (Heilbrunn and Lisa Iannone 2020). On the one hand, refugees forcibly depart from the networks and institutional environments of their home countries (Wauters and Lambrecht 2008). Wars and conflicts – which force individuals to leave their regions or countries and become internally or globally displaced – destroy structures of social networks that were previously available (White and Tadesse 2010). On the other hand, refugees are assumed to be less embedded in their host societies due to their unfamiliarity with the receiving institutions. While migrants commonly select desirable destinations that fulfil certain pre-defined conditions (such as the existence of ethnic networks, national immigration policy, and the strength and openness of the domestic market), refugees generally do not know where they will settle after their evacuation. Consequently, refugees can neither select destinations where they can rely on ethnic capital (Dana et al. 2019; Borjas 1992; Kazlou and Wennberg 2021) nor prepare for new institutional environments, such as new cultures and languages (Wauters and Lambrecht 2008). Furthermore, refugees who have newly arrived in the host country are in the significant transition phase in which they must re-define their connection to their home countries while rapidly building a new relationship with their host countries at a time of significant uncertainty.

Based on the discussions above, this study seeks to understand the ways in which refugees’ embeddedness evolves and how the embedding process influences access to resources for their entrepreneurial activities.

Methodology

Research Design

This study uses an explorative qualitative method to understand the embedding process of refugees and its influence on their entrepreneurial processes. I chose to focus on a single country (Germany) in order to fully consider its social context (cf. Welter 2011) and institutional settings. Furthermore, this study emphasizes the perspective of the observed group (entrepreneurial refugees) in the early stages of data collection and analysis, which provides plentiful chances to discover novel aspects (Gioia, Corley, and Hamilton 2013).

Data Collection

In 2019, Germany hosted the third-largest displaced population in the world (UNHCR 2020). The UNHCR (2020) reported that 1,146,685 refugees and 309,262 asylum seekers were living in Germany at the end of 2019.¹ In Germany, all individuals seeking asylum are registered on the Central Register of Foreign Nationals² and sent to local reception facilities of the federal state. If the asylum-seeking process is successful, refugees receive temporary residence permits for three to five years with which they can become self-employed. Asylum seekers and refugees are required by the Federal Office for Migration and Refugees³ to attend an integration course to learn the language, culture, and history of Germany.

Twenty semi-structured interviews with refugees in the early stage of developing their businesses were collected for this study. Specifically, all respondents were still in the business development phase or had recently registered their business. All interviewee names were anonymized. Data collection was conducted as part of the Erasmus+ Virtual Incubators for Refugee Entrepreneurs (VIFRE) project between 2018 and 2019. This project aims to develop entrepreneurial support for refugee entrepreneurs across Europe. The primary reason for focusing on nascent refugee entrepreneurs was that refugees who arrived in Europe in the recent refugee wave were mostly in the preparation or early phase of business development. Furthermore, these newcomers were in the middle of a turbulent period in which their embeddedness composition was changing drastically. The author developed an initial interview guideline and sent the draft version to several practitioners supporting entrepreneurial refugees who could provide feedback and suggestions based on their hands-on experience.

The interviews were structured as follows. Interviewees were first asked to give general information about their backgrounds. The second part of the interview was explorative: interviewees were encouraged to freely explain their entrepreneurial motivation and business ideas, as well as their subjective perceptions of the advantages and disadvantages they encountered in their entrepreneurial activities. They were also asked about their departure from their home countries, including how they detached from their original context and how they re-established their lives and social networks in Germany. At the outset, the interviews focused on the loss of access to home-country resources and barriers to resource access in the new settlement. As the interviews proceeded, however, it became evident that the respondents had not only lost their homeland connections but had also started re-defining their relationship with their home countries. As a result, the interviewers started asking the respondents how they lost their initial connections, how they re-built them in Germany, and how they re-connected themselves to their home countries, thereby analysing their embeddedness. The third part of the interview was the most structured and elaborated on the advantages and disadvantages related to specific dimensions of entrepreneurship, such as social capital, financial capital, institutional knowledge, entrepreneurial skills, and IT skills.

This study collaborated with two incubators in Germany (in Berlin and the Ruhr) as part of the VIFRE project consortium to conduct interviews with entrepreneurial refugees. Since identifying refugees who conduct business or are planning to launch a business is difficult, the incubators served as both gatekeepers and interviewers. Given that these incubators offer specific programmes for refugees who intend to become entrepreneurs, they could select programme participants who met the selection criteria and who were ready to share their experiences in interviews. Due to the already established relationships between programme participants and incubator managers, 20 refugee entrepreneurs were convinced to take part in this study. Purposeful sampling (Eisenhardt 1999, 2007) was used, and the project consortium selected refugees with diverse academic and vocational backgrounds and business ideas (see Table 1). At the same time, the incubator managers also acted as interviewers under the researcher’s oversight, not only since they had access to potential respondents, but also since they had established trusting relationships with the interviewees prior to this study. This level of trust was essential to obtain both positive and negative experiences in the respondents’ trajectory after their sudden and emotionally disturbing departure from their home countries. To ensure the quality of interviews, the author organized a workshop for interviewers that explained the intensive interviewing method, which relies on ‘an open-ended, in-depth exploration of an area in which the interviewee has substantial experience’ (Charmaz 2014, p. 85) while focusing on a particular topic.

Table 1. List of the Respondents

Abbr.	Age	Sex	COO	Arrival	Location	Educational background	Vocation background	Business idea
G-1	35–44	M	Syria	2015	The Ruhr	Uncompleted university degree in dental science and marketing	Worked in the IT system	Export of German second-hand machines
G-2	25–34	M	Syria	2015	The Ruhr	Middle school	Real estate investment	Real estate investment
G-3	25–34	M	Syria	2016	Berlin	Master’s degree in advanced analytics, and a bachelor’s degree in engineering	Data science, business administrator for an electronic stock market	Tracking device for kids
G-4	25–34	M	Syria	2016	Berlin	Bachelor’s degree in accounting	None	Felafel takeaway
G-5	35–44	M	Syria	2016	The Ruhr	High school	Manufacture and trade of curtain accessories	Trade
G-6	25–34	M	Syria	2015	Berlin	Bachelor’s degree in economics	Project management	A street restaurant for traditional Syrian food
G-7	25–34	F	Afghanistan	2015	Berlin	Bachelor’s degree in agriculture	Diverse management experience in international organization and education contexts	Social business to enable women to work at home
G-8	25–34	M	Tibet	2015	The Ruhr	Middle school	English teacher, tourism	Tibetan restaurant
G-9	20–24	F	Syria	2016	Berlin	Uncompleted Bachelor’s degree in English literature	Call centre and HR department	Smartcard for emergency situations
G-10	25–34	F	Serbia	2001	The Ruhr	Elementary school	Restaurant	Balkan snack bar
G-11	35–44	M	Iraq	2015	Berlin	Middle school	Driving school, painting	Party catering service
G-12	35–44	M	Congo	2009	The Ruhr	Diploma in biology and chemistry, and a bachelor’s degree in economy and management	Marketing and sales	Export used cars and automobile parts to Africa
G-13	20–24	M	Iraq	2015	The Ruhr	High school	Mobile phone repairing service	Mobile phone repairing service
G-14	35–44	M	Iran	2012	The Ruhr	High school, apprenticeship in goldsmith	Wholesales for goldsmith	Goldsmith with Iranian design
G-15	25–34	M	Iran	2016	Berlin	Master’s and bachelor’s degree in entrepreneurship	Consultation	Coaches for singles
G-16	25–34	M	Syria	2015	The Ruhr	Master’s degree in hospitality	Hotel management	A food truck for traditional Syrian food
G-17	35–44	F	Iran	2009	The Ruhr	Bachelor’s degree in arts	Freelance in arts	Education institutions for children (arts and cartoons)
G-18	25–34	M	Jordan	2015	The Ruhr	High school	Car trade, construction	Export cars to Jordan
G-19	35–44	M	Iran	2009	The Ruhr	Uncompleted university degree	Graphic design, movie animation	Animation movie company with children
G-20	35–44	M	Syria	2014	The Ruhr	Elementary school	Dry construction	Dry construction

Data collection took place in the spring of 2018 via face-to-face meetings or video chat. The duration of interviews ranged from 40 to 80 minutes, and respondents could select the language of the conversation (German or English). While the respondents could adequately express themselves in daily conversation, most had an intermediate level of language proficiency, which may have affected interview quality.

Data Analysis

All the collected interviews were transcribed in their original languages (German and English), and the interview transcriptions in German were translated into English. This study used MAXQDA and Microsoft Excel for technical assistance in the data analysis and followed a hybrid approach of inductive and deductive coding to develop themes (Fereday and Muir-Cochrane 2006, 82). This approach allowed the study to integrate the themes driven by the embeddedness theory while also considering themes emerging directly from the data. By doing so, this study was able to develop themes by capturing the findings unique to the contexts of refugee entrepreneurs while highlighting the theoretical dimensions of refugees’ embeddedness.

The data analysis comprised multiple steps. The first-order analysis emphasized the interviewees’ subjectivity by deliberately using their own terms, which means that the author paraphrased all the phrases and sentences that demonstrated how respondents’ embeddedness in their home and host countries changed and how their embeddedness transformation processes influenced their entrepreneurial activities. Paraphrasing was useful as it not only reduced the vast amount of empirical information but also interpreted refugees’ intentions, which were not always clear due to their limited language proficiency. The first-order analysis yielded 1,289 codes in total.

In the second step, the researcher developed labels using MAXQDA to group the paraphrased quotes into the following tentative categories: detachment from home countries; rebuilding connections to home countries; difficulties due to lack of connections in the host country; and developing new ties in the host country. Once all the paraphrases were grouped into these categories, the researcher compared all the first-order codes again to find patterns and derive more specific second-order categories. Subsequently, the researcher started considering the literature on refugee entrepreneurship and embeddedness of (migrant) entrepreneurship. During this process, the author became aware of the concept of ‘disembedding’ and ‘re-embedding’ (Polanyi 1944; Giddens 1990), which helped theorize the embeddedness transformation of refugees. In this phase, the aforementioned tentative categories were transformed into theory-driven codes: (1) disembedding from home countries; (2) re-embedding in home countries; (3) under-embeddedness in the host country; and (4) (influencing factors on) re-embedding in the host country. The researcher then reassigned all the first-order codes to these themes to analyse how each embedding process influenced refugees’ access to resources. The author was then able to identify how the embedding processes led to resource loss, resource activation, and resource building. The data structure is visualized in Figure 1.

Figure 1. Data Structure.

Findings

Disembedding from Home Countries

Refugees became disconnected from their home-country contexts, which led to considerable changes in their resource constellation in two main ways: (i) temporary or permanent loss of resources and (ii) value reduction of resources.

First, respondents lost resources built in their home countries, such as networks, assets, and financial capital. Due to the death or forced displacement of contacts, refugees’ social networks in their home countries no longer exist as they used to. Some lost their family and friends, while others were separated from family. Simultaneously, they lost their assets, such as real estate and businesses. In many cases, the refugees experienced a permanent loss of home-country resources, while several of them experienced a temporary loss of resources. For instance, entrepreneur G-14ʹs savings still existed in a bank account, but he could not access them: ‘I am not allowed to transfer money from Iran. The Iranian [government] does not allow [the banks] to have contact with European banks’ (G-14). In other cases, refugees’ assets (such as houses, properties, and shops) were either destroyed or confiscated by their respective governments.

Second, several respondents noted that their formal qualifications, acquired in their home countries, lost their original value and meaning in Germany. Ten of the 20 interviewees had either graduated from higher education institutions or studied for some time. However, they realized that their academic qualifications no longer held the same value in Germany as they had been unable to finish their studies due to conflicts and therefore lacked official certificates. Even in cases where they had completed their degrees, the refugees faced greater difficulties than migrants in transferring their formal qualifications since they often had no chance to bring their certificates with them due to the abruptness of their departure. Additionally, the German government did not fully recognize the value of these academic qualifications due to differences between the educational systems of the countries involved: ‘The German government said that my master’s degree is only comparable to a bachelor’s degree here’ (G-17). Ultimately, the fact that home-country qualifications were not transferrable forced certain refugees to drastically change their career paths. Entrepreneur G-4, for example, had to forfeit his career as an accountant:

I was an accountant by profession. I completed a bachelor’s degree to [become an accountant]. […] If I want to work as an accountant in Germany, I need to complete a C-1 level⁴ German course and study for two or three additional years at a college to acquire a certificate. That is too much for me. That is why I want to become an entrepreneur.

Equally, the interviewed refugees shared frustrations that their home-country vocational or entrepreneurial experiences also became less valuable in the German context. For instance, entrepreneur G-5 had many years of entrepreneurial experience operating a business that manufactured and sold accessories for curtains in Syria. Significantly, curtains are essential interior components in Syrian culture and need to be tailored to the individual customer’s taste. To leverage this rich industrial experience, entrepreneur G-5 initially intended to set up a similar business in Germany. After only a few months, however, he realized that German customers were not keen to customize their curtain accessories. This example demonstrates how some refugees came to the realization that the industry know-how that had proved valuable in their original context no longer held outside it. Respondents also expressed confusion about the reduced value assigned to their experiences because they were unaware that their experience was embedded in their home countries and that its value would be lost outside its original context.

Re-embedding in Home Countries

While material assets and financial capital were lost in the cases of nearly all respondents, the findings also demonstrated the activation of resources related to their home countries in the following two ways: (i) reinterpreting ethnic/diaspora capital and (ii) mobilizing entrepreneurial capital.

First, disconnectedness from their home countries allowed the refugees to reinterpret their own identities and ethnic backgrounds. Forced displacement was not simply an instantaneous event for these individuals; rather, it involved their cognitive process to recognize a loss of certain resources that were bound to the original context and to reinterpret their values in new environments. In some cases, the refugees perceived their nationality even more explicitly than before their displacement, which drove the formation of a new identity:

I would say that one of the major barriers is my nationality. I always have the feeling that Germans, or Europeans in general, are afraid of partnering with me. People always consider me as a Syrian and judge me with a stereotype, although I have no connections to the country anymore. (G-3)

For others, being outside their home countries has afforded them the opportunity to reinterpret and strengthen their emotional connection to their heritage. As a result, several respondents proactively built ties with people of the same origin. For instance, entrepreneur G-9 has devoted herself to rebuilding her home-country relationship by contributing to Syrian society:

I want to offer online workshops from here to Syrians in Syria to provide them with important information and ideas about how they can be entrepreneurs and start their own projects. In Syria, people face so many problems, and I feel that it is simply not fair that we can work on interesting ideas and have so many opportunities in Germany. Many Syrians in Syria deserve this chance, but they do not have it.

Here, entrepreneur G-9ʹs sense of homeland belongingness drove her to engage with her diaspora community. Through interactions with other members of ethnic communities and with local society, these respondents have started to look at their cultural heritage and ethnic knowledge differently. Entrepreneur G-13, for example, had chosen to target his co-ethnics as customers since he understood what his community wanted in terms of service and could build relationships of trust with them. Entrepreneur G-14 not only targeted Iranian customers but also branded and marketed his business as an ‘Iranian Goldsmith’ to acquire German customers. Facing significant resource losses, the participants have clearly started to consider the resources embedded in their original contexts from an outsider’s perspective, thereby discovering the potential to create new values that harness their ethnic backgrounds or knowledge.

Secondly, this study observed that several respondents mobilized their entrepreneurial capital:

In Syria, I was an entrepreneur for seven or eight years out of my 11-year vocational experience. This [entrepreneurship] is an essential part of my personality, and this [entrepreneurship] is my path. Probably, this idea will fail, but I will try another one. Let us say this [entrepreneurship] is my destiny. (G-3)

This study also observed resourceful behaviours among refugee entrepreneurs. For instance, entrepreneur G-13 demonstrated skill bricolage behaviours as he learned how to repair smartphones by watching YouTube videos and learning by doing in Iraq. Furthermore, several respondents exhibited significant entrepreneurial resilience: ‘I lost everything in my home, family, and everything, so everything is gone. I had two stores, but I lost everything. Why should I be scared of anything?’ (G-4). What these respondents share in common is a robust willingness to pursue entrepreneurial paths despite a high level of uncertainty. In the face of significant adversity and loss of resources, their entrepreneurial traits continue unabated.

Under-embeddedness in the Host Country

As most respondents were still new to Germany, they encountered numerous obstacles that led to resource deficiencies in their host country. In pursuing an entrepreneurial career, respondents realized their disconnectedness from German institutional frameworks, and the lack of social ties hindered them from acquiring or building new resources.

At the institutional level, respondents were disconnected from German formal institutions that would play crucial roles in their entrepreneurial activities. These institutions include the Jobcentre, the taxation bureau, and the Chamber of Commerce, who offer help to the self-employed in accessing supportive services and dealing with the inevitable bureaucratic processes that ensue. Knowing the fundamental functions of these institutions is therefore essential for refugees who want to start a business. Surprisingly, however, most respondents did not know their functions or had an incorrect understanding of them: ‘I do not know anything about the Jobcentre and the financial office’ (G-1). Interviewees were not only unfamiliar with their functions but also had difficulties in understanding them due to the complexity of formal institutional systems: ‘The German taxation system is too complicated. The problem is that I do not know where to start and how I can get information related to taxes’ (G-14). A primary reason for refugees’ inexperience of formal institutions is the high level of bureaucracy in Germany, which most respondents had not experienced in their home countries. Entrepreneurs discussed the difficulties they faced when confronting German bureaucracy: ‘It is complicated because we have zero experience with bureaucratic procedures’ (G-6); ‘the problem is there are so many rules and papers that you need” (G-8).

Another challenge at the institutional level is related to German regulations. For instance, entrepreneur G-5, a Syrian entrepreneur who owned a car battery factory in Syria, could not pursue the same business idea due to numerous regulatory barriers in the corresponding industry in Germany:

I do not understand why certain things are forbidden. I feel that everything related to car batteries is prohibited. […] For example, there are so many cars in Germany. That means there are millions of batteries. But when a battery is broken, you have to collect all the batteries and you cannot just bring one battery from one location to another without a special car. What is that about? Why? I have dealt with broken car batteries in Syria for many years. They are not dangerous at all.

This study also revealed that refugees’ legal status as asylum seekers or refugees in Germany hindered them from accessing public or private services – including German financial institutions – as well as limiting their sense of legitimacy: ‘I am a refugee, which is the problem. I do not know what I can do and what I cannot do’ (G-18). While the Jobcentre does offer a small amount of credit for refugee entrepreneurs, only a few respondents had received any such sum.

At the network level, respondents generally suffered from a lack of social networks in Germany: ‘I do not know any German [freight] forwarding agents. I need help to find them’ (G-18). Far removed from their established home-country professional networks, in Germany, the respondents lacked connections to key stakeholders, who could have enabled them to leverage their human capital. Furthermore, respondents claimed their need for German locals who could support them in dealing with German institutions: ‘If only I had a German partner, I could be sure that my business would be successful. […] It is super important to have a local partner because of language, because of regulations, because of hundreds of things’ (G-15).

Interestingly, support from one’s ethnic community was not as prevalent for the refugees in this study as it is for migrant entrepreneurs. Only a few respondents received marginal support from their own ethnic community: ‘No Syrian helped me in building this business’ (G-20). This study even observed the reverse effects of ethnic capital in several cases. For instance, entrepreneur G-13 experienced an unsupportive attitude among his co-ethnics towards his entrepreneurial activities: ‘Arabian and Kurdish people were the ones who gave me the wrong information. I was confused about their behaviours. They did not help me, either. I can trust Germans but have problems with them’ (G-13). Given that Germany has received many migrants in recent decades who have formed ethnic communities, it is somewhat counterintuitive to observe insignificant support from ethnic networks. These findings imply that refugee entrepreneurs may not be fully leveraging ethnic capital, which might have helped them overcome institutional barriers in their host countries.

In turn, lack of familiarity with German institutions and of host-country social networks resulted in insufficient knowledge about German markets. Entrepreneur G-16, for instance, wanted to open a Syrian food truck in Germany but felt frustrated by his lack of market knowledge: ‘I need someone who can tell me the market situation, competitors, and potential risks’. In a similar vein, entrepreneur G-3 struggled to understand the German market and reach potential customers:

I have been living in Germany for one and a half years. Still, I always feel insecure about how business works in Germany. I always see cultural differences between Germany and Syria. [Currently] I do not fully understand how German customers think and [what they] mean. I need someone who can tell me how German customers think because I cannot reach many people by myself.

Overall, most respondents felt lost and confused about not knowing what they should know as entrepreneurs. In their eyes, the German formal system is overly complicated and requires them to learn a vast amount of information: ‘I know that it [understanding the formal requirements and procedures to become an entrepreneur in Germany] is super important. But I do not know where to start and what I should do’ (G-15).

Re-embedding in the Host Country

The empirical evidence outlined above demonstrates the difficulties encountered by refugee entrepreneurs when seeking to build new resources due to their lack of institutional connections and social ties in Germany. In response, the study observed that refugees developed networks with particular groups and communities that helped them overcome these difficulties: (i) work environments; (ii) refugee support environments; and (iii) regional entrepreneurial ecosystems.

First, while the participants in this study perceived a higher level of market uncertainty than locals, those who had work experience in Germany tended to feel more secure about institutional environments than those who had not worked in the country before. Entrepreneur G-4 gained such confidence by working at a German restaurant: ‘During my work, I always tried to talk to customers and employees to learn. I had many contacts with customers. That experience helped me to understand how things work in Germany’. Notably, G-4 had no prior experience in hospitality as he had worked as an accountant in Syria. However, this work experience in a different field, for which he was overqualified, provided him with valuable host-country knowledge and resources.

Second, the respondents appeared to be in close contact with refugee support organizations, which assisted them in rebuilding their lives in Germany. These organizations, including business incubators, played a significant role in filling entrepreneurs’ knowledge gaps about German institutions: ‘All the topics that I learned from the [business incubator] programme were important because I did not know the German system well’ (G-17). Support organizations offer not only general information about German systems but also entrepreneurship-specific content. Respondents shared the difficulties that they faced in developing a business plan in German, which was required by formal institutions such as banks and the Jobcentre. The support programmes helped resolve these difficulties. These support organizations also played a critical role in encouraging respondents’ entrepreneurial initiatives: ‘They helped me work on the business idea, think more about it, and believe that I can make it’ (G-7). However, while the role of these organizations was undoubtedly essential to refugee entrepreneurs striving to overcome institutional barriers, this study also observed an over-reliance of several respondents on their support. For instance, entrepreneur G-14 voiced that over 90% of the support he received in Germany had come from the business incubator and that he had not proactively pursued networks outside the programme. Similarly, a single incubator employee helped entrepreneur G-13 in almost every regard, ranging from finding a German language school to developing a financial plan and accompanying him to appointments at public organizations.

Third, this study observed that refugees’ networks within a regional entrepreneurial ecosystem enabled them to overcome obstacles in their host country. This study sampled refugee entrepreneurs in two locations: Berlin and the Ruhr. The respondents in Berlin expressed a sense of attachment to the city and frequently cited the local startup scene as a critical contextual factor. For instance, entrepreneur G-15 regularly participated in Berlin startup events and built networks with local entrepreneurs, and his engagement in the city’s entrepreneurial ecosystem led to an opportunity to pitch his business idea to Zalando, itself a successful Berlin startup. In contrast, respondents in the Ruhr did not consider the region attractive: ‘I do not like Dortmund. I have lived in Dubai, Istanbul, and my hometown. All these places are much more attractive than here’ (G-1); ‘No one helps me in Cologne’ (G-14). Ruhr-based entrepreneurs lacked the opportunity to network with other startups and entrepreneurial support organizations.

In summary, the findings demonstrated how refugee entrepreneurs temporarily or permanently lost their initial resources embedded in their host countries and needed to rebuild resources by redefining their homeland connections and reinterpreting their resources embedded in their home-country contexts. The participants encountered difficulties in building new resources due to their under-embeddedness in the host country but developed new resources there by establishing new connections.

Discussion

Based on the findings above, this section develops a framework of the (dis)embedding process of refugee entrepreneurship, as visualized in Figure 2.

Figure 2. The Framework of Dis- and Re-Embedding of Refugee Entrepreneurs.

First, refugees’ disconnectedness to their homeland is comparable to the notion of disembeddedness first conceptualized by Giddens (1990), who defined it as ‘the “lifting out” of social relationships from local contexts of interaction and their restructuring across indefinite spans of time-space’ (p. 21). While the concept was originally coined to examine macro-level economic activities and markets in the modern world (Farrell 2015; Muellerleile 2013), management scholars have applied it to explain the detachment process of firms or entrepreneurial individuals from a particular context in which they were initially embedded, such as entrepreneurs disembedded from local communities (Christian et al. 2011) or multinational enterprises from regional contexts (Mattes 2013).

This study understands disembeddedness as a process of disembedding (Sandbrook 2011; Hellerstedt et al. 2019). This conceptual process gives this study an opportunity to understand how refugees lose and rebuild their social relations in their home and host countries. This study’s empirical data revealed how refugees, as individual entrepreneurial agents, were forcibly disembedded from their original context – and the networks and institutional environments that had served them well – either because the context has been destroyed or is no longer what it used to be. The literature suggests that resources are created through mutual interactions between people, and with social networks and institutional structures in particular, and that entrepreneurial agents can only access these resources when they are embedded in these networks and structures (Jack and Anderson 2002; McKeever, Anderson, and Jack 2014). Notably, this study observed two distinct patterns of losing resources. The first was an immediate loss of assets or capital (properties, financial capital, contacts) since these resources were either destroyed or confiscated. The second, by contrast, required the refugees to reflect on the value of resources bounded to their original contexts or networks.

Intriguingly, many respondents were not aware that their vocational/entrepreneurial experiences and qualifications were not entirely transferable to the new context until they attempted to mobilize them there. In other words, disembedding involves a refugees’ cognitive process to acknowledge resource loss in the new context. Zukin and DiMaggio (1990) coined the term ‘cognitive embeddedness’ to refer to ‘the ways in which the structured regularities of mental processes limit the exercise of economic reasoning’ (p. 15). Zuckin and DiMaggio further argued that the notion of cognitive embeddedness is essential to understanding the limited ability of economic agents to employ synoptic rationality, which is a fundamental assumption in neoclassical theory. Forced displacement dissolves refugees’ cognitive limitations (bounded to the original context) to capitulate a loss of resources. Therefore, this study develops the following research proposition:

RP-1: Disembedding from home countries evokes a cognitive process in refugee individuals who, when engaging in entrepreneurial activities, become aware of a temporary or permanent loss of material assets or social capital and a value reduction of resources bounded to their home-country contexts.

Second, the (dis)embedding process does not entail an entire or eternal loss of connections to the refugees’ home countries. As diaspora studies suggest, individuals often maintain emotional ties to their homelands even after several generations (Cohen 2008; Brubaker 2005). Through entrepreneurial activities, the respondents redefined their emotional relationship with their home countries, which resulted in the activation of resources. This study understands this transition as a re-embedding process of refugees in their home-country contexts.

Giddens (1990) defined re-embedding as ‘the reappropriation or recasting of disembedded social relations so as to pin them down (however partially or transitorily) to local conditions of time and place’ (pp. 79–80). Re-embedding is considered the counterpart of displacement: while disembedding detaches social relations and information exchanges out of specific time-space contexts, it provides new opportunities for their reinsertion. Haunschild (2004) extended the concept of re-embedding by introducing the term ‘economic re-embeddedness’ to explain how disembedded social relations become re-embedded in resource exchange relations. Refugees, who are disembedded from their original social relations and institutional environments, then re-embed their entrepreneurial activities in the context of their home countries while being physically absent.

The findings showed that refugee entrepreneurs’ resource-seeking behaviours facilitated their re-embedding process in their home countries. A significant loss of resources caused by disembeddedness allowed them to re-evaluate accessible or available resources. Respondents realized that their belongingness to their heritage and ethnic communities would offer unique social capital as sharing norms and cultures evokes legitimacy and trust. Ultimately, this cognitive process reflects the discovery of the existence and potential usage of ethnic capital (Dana et al. 2019; Borjas 1992). This seems to fit into Giddens (1990) argument, who considered re-embedding as a means of anchoring trust in the integrity of colleagues (co-ethnics).

This study also observed that several respondents became involved in diaspora communities by re-embedding themselves in social links bounded by orientations towards (imaginary) homelands (Dutia 2012; Newland and Tanaka 2010). Furthermore, respondents realized that not all the resources related to their previous entrepreneurial activities were lost. They became aware that certain entrepreneurial capitals, such as entrepreneurial mindset (Shepherd and Patzelt 2018), resilience (Williams and Shepherd 2016; Shepherd, Philippe Saade, and Wincent 2020), and bricolage (Baker and Nelson 2005) are embedded in their cognitive contexts. In this way, I propose the following research proposition:

RP-2: Disembeddedness from home countries provides opportunities for refugee entrepreneurs to re-embed in their home countries by reinterpreting their ethnic and diaspora resources and activating entrepreneurial capitals to apply to their new contexts.

Once the refugees arrived in Germany, they started building social ties. Embedding in the new context is a long and complex process, which requires substantial effort: all respondents felt insufficiently embedded in German environments several years after their arrival.

The low level of refugee embeddedness in their host countries is similar yet different from the disembeddedness in their home countries. While disembeddedness applies to situations in which individuals become decontextualized from institutions where they used to be embedded, refugees are new to their host countries and have never been well-embedded in their institutions. Their situation in the host countries can be described through the concept of ‘under-embeddedness’ used in the migration entrepreneurship literature (Schnell and Sofer 2002, 2003; Heilbrunn and Mohammed Abu-Asbeh 2011). Schnell and Sofer (2002) applied this term to describe entrepreneurs who failed to transform their business networks in mainstream host-country markets into economic success.

Being under-embedded in their host-country institutions and networks, respondents faced significant resource deficiencies and lack of knowledge and know-how about the formal institutions of their host country, as well as business contacts and market knowledge. The findings revealed that refugees’ significant unfamiliarity with and foreignness to host-country institutions, together with their fragile legal status, were significant barriers to integrating into German society. Consequently, their social and institutional under-embeddedness fuelled their perceived uncertainty and constraints regarding their resource mobilization in the host country. In turn, some respondents were unable to sufficiently re-embed in their home country, which also limited their access to related resources there. The corresponding literature suggests that refugees suffer a loss of ontological security when they are embedded in neither their community nor the host country (Zoppi 2019). While social interactions may strengthen refugees’ willingness to cope with uncertainty (Jiang et al. 2021), when they are simultaneously disembedded from (and not yet sufficiently re-embedded in) their home country and under-embedded in their host country, they face dual resource disadvantages, which significantly hinder their entrepreneurial activities in the host country.

In contrast, when refugees’ re-embedding processes advance over time, their embeddedness can be a source of advantage. Research provides evidence that refugees repatriate and resettle in their home countries or rebuild connections to engage in homeland investment and transnational economic activities (Halilovich and Efendic 2021; Brzozowski and Cucculelli 2020). When refugees are re-embedded in both their home and host countries, their embeddedness offers dual resource advantages as they can combine resources from both contexts (Kloosterman 2010). Therefore, this study develops the following propositions:

RP-3a: Refugee entrepreneurs encounter dual resource disadvantages, which hinder them from becoming entrepreneurs when they are insufficiently re-embedded in the home country and under-embedded in the host country.

RP-3b: Refugee entrepreneurs benefit from dual resource advantages, which enable them to mobilize their entrepreneurial resources when their re-embedding in both the home and host countries is able to progress.

This study observed how refugees’ embeddedness in sub-contexts influenced their overall re-embedding process in the host country. First, the findings highlight the importance of work experience in the host country as refugees can become embedded in small but local professional environments. On the one hand, the empirical evidence demonstrates that refugees were under-embedded in the institutional environments and markets of Germany, and their under-embeddedness hindered them from building resources in their host country. On the other hand, several respondents (e.g. G-3, G-4, and G-8) were able to mitigate institutional hindrances and reduce psychological barriers through their work experience – a similar outcome to the findings of Gericke et al. (2018). While respondents were under-employed based on their existing skills, holding unrelated jobs and working with German colleagues and customers nevertheless helped them familiarize themselves with German job culture, which reduced the psychological barrier towards the host country’s formal institutions.

Second, while respondents generally suffered from a lack of social ties in the host country, they were deeply embedded in the refugee support environment. Recently, several studies have illuminated the role of such programmes for refugee entrepreneurs in overcoming the challenges of new environments: providing not only technical knowledge but also emotional support, networking opportunities, and financial capital (Harima, Freudenberg, and Halberstadt 2019; Babin 2019; Isaak 2020). Meister and Mauer (2019) found that incubation programmes help refugees expand their social, cultural, and human capital in the host country, which increases their host-country embeddedness. This study observed similar functions of business incubators in refugees’ entrepreneurial activities. However, I also observed a reverse effect whereby participants’ dependency on support organizations or key support personnel hindered them from proactively developing social ties. For instance, those respondents who relied heavily on one local supporter (G-13 and G-18) neither proactively built social ties with locals outside the support environment and co-ethnics nor developed their understandings of German systems and markets; their situation can be understood as over-embeddedness in their support environment. Indeed, while the predominant view is that embeddedness creates access to resources, several scholars have argued that over-embeddedness of economic activity in social relations impedes performance (Masciarelli, Laursen, and Prencipe 2010; Gargiulo and Benassi 2000; Andersen 2013). This over-dependence on a specific network makes economic actors vulnerable to exogenous shocks or isolates them from information that exists outside the network (Uzzi 1997).

Third, this study observed that refugees developed their social embeddedness in a thriving entrepreneurial ecosystem, which provided them with the strengths to overcome obstacles caused by their under-embeddedness in the host country. Entrepreneurial ecosystems have been defined as sets ‘of interdependent actors and factors coordinated in such a way that they enable productive entrepreneurship within a particular territory’ (Stam and Spigel 2016, 1). Our sample comprises refugees in Berlin and the Ruhr. One of the significant differences between these two regions is that there is an internationally recognized startup community in Berlin (The Startup Genome 2020). Entrepreneurial ecosystems aggregate various resources such as human, social, financial, and technological capitals, and participation in interactions within a particular ecosystem fosters resource access (Brown and Mason 2017; Spigel and Harrison 2018; Roundy and Bayer 2019). Here, the interviewees in Berlin could access resources embedded in the regional entrepreneurial ecosystem by attending startup events and support programmes, which gave them similar supporting effects to business incubators, such as providing information on startup processes and legalizing businesses, facilitating essential contacts with investors or within particular industries, and offering vital emotional support. Based on the discussions above, this study develops the following research propositions:

RP-4a: Refugee entrepreneurs advance their re-embedding processes in the host country by developing their social embeddedness in work environments, which helps reduce their unfamiliarity with institutional environments in the host country.

RP-4b: Refugee entrepreneurs advance their re-embedding processes in the host country by embedding themselves in the refugee support environment, which enables them to bridge institutional and network gaps between refugees and the host society. However, when refugees do not proactively develop social ties outside the support environment, their connections to the support environment can create over-embeddedness, which hinders their long-term re-embedding process in the host country.

RP-4c: Refugee entrepreneurs advance their re-embedding processes in the host country by developing their social embeddedness within an active, international-oriented entrepreneurial ecosystem, which provides helpful support in bridging institutional and network gaps between refugee entrepreneurs and the host society.

Conclusions

Contributions to Theory

The emerging literature on refugee entrepreneurship has highlighted key obstacles that refugee entrepreneurs face in their host countries (Wauters and Lambrecht 2008; Lyon, Sepulveda, and Syrett 2007; Alrawadieh, Karayilan, and Cetin 2019; Easton-Calabria and Omata 2016). However, these studies have tended to merely describe these disadvantages as ‘out there’ and to largely neglect the role of refugees as entrepreneurial agents. In entrepreneurship research, scholars understand that opportunities exist within the structure but that they only become evident when entrepreneurs act on them (Jack and Anderson 2002). By applying the concept of embeddedness, this study examined how refugees’ (dis)embedding processes in their home and host countries enable or constrain their access to entrepreneurial resources not only from the perspective of institutional obstacles per se but also through the interactions between refugees and the institutional structure. Depending on their embeddedness composition, refugees may encounter dual resource disadvantages or mobilize resources from multiple contexts. Although previous studies have tended to describe refugees as the have-nots lacking in essential entrepreneurial resources, this study provides a more comprehensive view of their resource situation by considering temporarily lost and reobtained resources in their home and host countries.

This study also extends the concept of mixed embeddedness (Kloosterman, van der Leun, and Rath 1999; Kloosterman and Rath 2001). By examining refugee entrepreneurs’ embeddedness, this study contributes to developing mixed embeddedness in the following three ways. First, the concept of mixed embeddedness has been criticized for its structural deterministic nature (Sepulveda, Syrett, and Lyon 2011). Addressing this aspect, this study illuminates refugees as entrepreneurial agents who mobilize resources embedded in their home and host countries. The findings suggest that disembedding and re-embedding do not immediately change refugees’ resource composition but instead require a cognitive process on the part of entrepreneurial agents to become aware of a loss of resources and to reinterpret the value of their resources by building a new emotional relationship with their home countries. This study also demonstrated the mutually constitutive nature of embeddedness as it creates access to resources for refugee entrepreneurs, but these resources gain value only when they are mobilized to create idiosyncratic resource combinations. Furthermore, this study shows how the processes of disembedding and re-embedding occurred at different but interrelated levels – structural, relational, and cognitive – that are mutually influential. In this context, refugees are not submissive to their embeddedness at the structural level. Rather, they are able to make sense of the transformation of their connections in/to their home and host countries and its influence on their resource composition and to proactively act on developing new social ties or redefining their emotional connections to their homelands, which in turn influence their embeddedness at the structural level.

Second, the literature has predominantly treated mixed embeddedness as a somewhat stable state (in migrants) and thus neglected its process dimension (Barrett, Jones, and David 2001; Price and Chacko 2009; Langevang et al. 2015; Solano 2020). By contrast, this study theorized the process of disembedding and re-embedding in nascent refugee entrepreneurs. Significantly, disembedding from the original context not only leads to a temporary or permanent loss of certain resources but also creates new chances for refugees to re-embed in their home-country environments by reinterpreting their ethnic/diaspora capital. Furthermore, disembedded individuals seek to re-embed not only in their original context but also in their new host country. The framework proposed in this study conceptualizes how refugees’ disconnectedness to their home country constrains access to resources and how the re-embedding process enables refugees to rebuild their resources.

Third, previous discussions on (mixed) embeddedness in entrepreneurship studies have not fully elaborated on the transformation of embeddedness, despite the fact that entrepreneurs’ contexts change over time (Welter 2011; Pasillas, Brundin, and Markowska 2017). Entrepreneurs are usually embedded in multiple contexts, but little is known about what detachment from one context or entrance into a new context means in practice to entrepreneurs and their economic activities. This study contributes to theorizing the disembeddedness of refugees from their home countries by investigating a loss of resources as its immediate consequence and re-embedding as a subsequent process. At the beginning of the re-embedding process, entrepreneurs are typically under-embedded in a new environment. This is evident especially when institutional environments and the social structure of the host-country context are significantly different from the original one, as re-embedding in a new context requires considerable time and efforts from individuals. At the same time, this study identified how refugees’ social embeddedness in their host country’s sub-contexts, such as work environments and refugee support organizations, helps them develop institutional embeddedness. By understanding under-embeddedness as a part of a dynamic re-embedding process, this study adds value to scholarly discussions on under- and over-embeddedness of migrant entrepreneurs, which have tended to describe migrants’ social relationships to particular ethnic groups or communities as purely static (Sofer and Schnell 2006; Schnell and Sofer 2002; Heilbrunn and Mohammed Abu-Asbeh 2011).

Implications for Practice

This study offers several implications for policymakers and refugee support organizations in refugee-receiving countries. The findings suggest that refugee entrepreneurs’ disadvantages are mainly caused by the temporary loss of home-country resources, as well as difficulties in building host-country resources. Policymakers are in a position to reduce the negative impact of home-country disembeddedness by recognizing or translating formal qualifications acquired by refugees in their home countries. The successful transfer of formal qualifications can help refugees avoid the damaging and dispiriting loss of their human capital. Furthermore, this study recommends that policymakers and support organizations take certain measures to expedite the embedding process of refugees in their host countries. More specifically, the findings revealed how refugee entrepreneurs are under-embedded in their host countries primarily due to their unfamiliarity with formal institutions, their legal status as refugees, and their lack of vocational experience. Promoting the support offered by formal institutions for refugee entrepreneurs, for example, can help bridge this knowledge gap. As refugees, entrepreneurs also face significant difficulties in financing their business ideas as they have limited access to formal institutions such as banks. Offering credit targeted at refugee entrepreneurs would be an effective support mechanism for policymakers or support organizations to help refugees overcome this initial capital gap. This study also revealed the importance of work experience in host countries since it allows refugees to learn about the market, culture, and language even when the work is unrelated to refugees’ previous vocational paths. Therefore, facilitating internships or part-time work for newly arrived refugees is a valuable way to help refugees become embedded in their host-country environments.

Limitations and Research Outlook

This study has several limitations. First, it researched refugee entrepreneurship in a single culture setting, which limits the possibilities of contrasting differences in the institutional environments of host countries. Institutional contexts and pervading sociocultural attitudes and perceptions of refugees may significantly vary depending on the local culture and national policy (Şimşek 2018). Since this study investigated refugee entrepreneurs in Germany alone, it is essential to critically evaluate how context-specific factors may influence the theorizing process and delimit the boundary of this study. Here, participants encountered significant institutional gaps between their home and host countries. German institutions are characterized by a high level of formality and bureaucracy, meaning that refugee entrepreneurs generally face immense challenges concerning legitimacy, culture, and language, which ultimately results in their under-embeddedness in the host-country environment. Conversely, this would indicate that refugees’ under-embeddedness may not be as significant for those who fled to countries with similar institutional environments. This study’s findings are therefore more relevant to understanding refugees’ disadvantages in developed countries rather than in developing countries.

Second, this study investigated refugee entrepreneurs who have recently arrived in Germany and are in the early stages of business development. As a result, this study could not consider how the embeddedness composition of refugee entrepreneurs changes and how refugee entrepreneurs overcome their dual resource disadvantages over time. Over the years, refugees have become increasingly socioeconomically integrated, which enhances their embeddedness in their host countries, and their connectedness to their home countries can also improve (Halilovich and Efendic 2021). On the contrary, since this study focused on newly arrived refugees, the transformation of refugees’ embeddedness in their home countries was out of scope here.

Third, the analytical focus of this study was identifying patterns that could describe the interaction between the embeddedness composition of refugees and their resources. Therefore, this study did not fully consider the unique contexts and backgrounds of individuals, such as institutional environments in their home countries, gender, religion, or types of economic activities, although these factors certainly play important roles in their embeddedness structure. For instance, the literature suggests that gender influences entrepreneurial behaviours in various ways, such as innovation processes and investor relationships (Alsos, Ljunggren, and Hytti 2013; Alsos and Ljunggren 2017).

Finally, this study conducted interviews in English or German, which were not the mother tongues of respondents. Interviewing for a qualitative study in a foreign language may affect data quality (Welch and Piekkari 2006; Chidlow, Plakoyiannaki, and Welch 2014).

Acknowledging limitations is important not only to delimit the scope of this study but also to derive meaningful suggestions for future research, thereby advancing the understanding of refugee entrepreneurship still further. This study recommends that future studies further analyse the (dis)embedding processes of refugee entrepreneurs in different countries or contexts, such as refugee camps. Moreover, it is essential to consider refugees’ entrepreneurial activities not only in Europe or North America but also in regions close to major refugee-sending countries, given the fact that the majority of forcibly displaced individuals flee to neighbouring countries (UNHCR 2020). To capture the dynamic transformation of refugees’ embeddedness composition more fully (cf. Kloosterman, Van der Leun, and Rath 1998), a longitudinal analysis of refugee entrepreneurs could be conducted, such as an in-depth case study similar to Bizri’s (2017). Refugees’ settings and environments, and the situation in their home country, may drastically change over time after they arrive in the host country; the temporal dimension therefore plays a significant role in the dynamic entrepreneurial processes of refugees. Furthermore, entrepreneurial activities of refugees are heterogeneous, depending on the contexts of their home and host countries, types of economic activities, and individuals’ backgrounds. These factors can influence the refugees’ embeddedness composition. Thus, future studies could analyse these influencing factors in greater depth. Future research should, for instance, pay particular attention to the role of gender since female entrepreneurs are characterized by distinctive embeddedness (Langevang et al. 2015; Roos 2019). This study also provides entrepreneurship scholars with (dis)embedding as a novel theoretical lens to examine the transition phase of entrepreneurial agents: for example, when scientists or students depart from university contexts to become entrepreneurs, or when employees leave their corporate contexts to pursue entrepreneurial paths, the transformation of their embeddedness compositions can be examined from the perspective of (dis)embedding.

Acknowledgments

I would like to thank (Institut für sozialpädagogische Forschung) ISM Mainz e.V. and SINGA Germany for enabling data collection for this study. Furthermore, I am grateful to Tenzin Yeshi (University of Bremen) for providing me with thoughtful comments as a friendly reviewer and to the special issue editors and anonymous reviewers for their invaluable feedback and suggestions, which helped me improve this paper.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This study was supported by the Erasmus+ VIFRE (Virtual Incubator for Refugee Entrepreneurs) project [Grant reference: 2017-1-FR01-KA204-037498].

Notes

1. Asylum seekers are individuals engaged in an institutional procedure in a country where they are foreigners, with the aim of obtaining the status of refugee.

2. The Central Register of Foreign Nationals (German: Ausländerzentralregister (AZR)) is a German database operated by one of the Federal Offices of Administration (German: Bundesverwaltungsamt). The database contains personal information of foreign nationals living in Germany.

3. The Federal Office for Migration and Refugees (German: das Bundesamt für Migration und Flüchtlinge (BMBF)) is a German federal agency responsible for the registration, integration, and repatriation of migrants. BMBF also performs asylum proceedings and makes decisions on asylum applications.

4. C-1 is the second-highest competence level according to the Common European Framework of Reference for Languages, defined as effective or advanced operational proficiency.