What is ethnic in an ethnic economy?

Abstract

This article examines critically the relationship between ethnicity and entrepreneurship in the sociology of immigrant economies. It argues that what is ethnic in an ethnic economy has often been confusingly conceptualised and that several factors now call for re-assessing the ethnic nature of immigrants' business activities. On the basis of a review of recent research, three such factors are outlined: the porosity of ethnic boundaries to cross-group business interactions; the diversity within immigrant economies in terms of status, gender, class and generation; and the political and institutional context in which immigrant economies take place. The conclusion stresses the need for multiple explanations of how and why immigrants become entrepreneurs, which take into account not only the meso-level constituted by ethnicity and social capital, but also micro-individual factors and macro-institutional settings.

Keywords:

• immigration
• entrepreneurship
• ethnicity
• German-Turks
• Berlin

Acknowledgements

I am grateful to Jan Rath and Alisdair Rogers, who encouraged me to write this article. It was researched and written during a postdoctoral stay at the Unité de Recherches Migrations et Société (URMIS) at the University of Paris VII – Denis Diderot, for which I am grateful to Jocelyne Streiff-Fénart and Catherine Quiminal.

Notes

1. According to Kloosterman and Rath (2003, p. 3), there were about 1700 publications dealing with immigrant entrepreneurship in 2003. A textbook was published on the topic in 2000 (Light and Gold 2000) and a handbook in 2007 (Dana 2007). ‘Ethnic business’ is also recognised as a distinct type of entrepreneurship in the small business literature (see for example Bridge et al. 2003, pp. 256–258).

2. As far as definitions are concerned, the scholarship has mostly focused on the differences between respective types of immigrant enterprises, particularly as far as ‘ethnic enclaves’ are concerned – a notion that became popular in the early 1980s following research on Cuban entrepreneurship in Miami, but was subsequently the object of conceptual confusion. For a recent review, see Portes and Schafer (2007).

3. Light and Gold (2000) thus distinguish another category, the ‘immigrant economy’, which refers to immigrant entrepreneurs hiring workers from other groups.

4. Another intellectual context that has been said to influence research on ethnic economies is the ‘American dream’ ideology: ‘the fact that scholarly concern with upward mobility of people of immigrant origin … through … entrepreneurship has emerged first in the USA is not unrelated to the general framework of the American success story … : that of a self-made man who overcomes the impediments due to his origins, class and birth thanks to the opportunities of an open and free society like America’ (Morokvasic 1991, pp. 408–409). Accordingly, the scholarship has been accused of a pro-business flavour that would ignore the injustices linked to capitalism (Bonacich 1993) and the socio-psychological costs of immigrant economies – in terms of migrants' stressful living and working conditions and of the inter-group tensions generated by the preference for co-ethnics (Min 1990, Waldinger 1995, Fong and Ooka 2002).

5. Data in this section come from Zentrum für Türkeistudien (2005).

6. Waldinger (1998) also shows how such mixed situations foster the use of English within immigrant economies, whereas one could have expected ‘ethnic’ businesses to favour the reliance on immigrants' languages.

7. Another challenge to the categorisation of entrepreneurs into ethnic categories is the existence of sub-ethnic boundaries. In Los Angeles, Light et al. (1994) show for example that there is no ‘Iranian economy’, but rather four sub-ethnic groups that each have their own economy; but other studies on Iranians in the same city ignore these internal boundaries (Dallalfar 1994, for example). Phan and Luk (2008) similarly argue that businesses in Toronto's Chinatown actually belong to distinct subgroups that are generally misleadingly categorised as ‘Chinese’. A survey of the literature on immigrant entrepreneurship thus found only one study focusing on intra-ethnic differences (Menzies et al. 2003).