Beyond the enclave? Break-outs into mainstream markets and multicultural hybridism in ethnic firms

Abstract

The literature on immigrant entrepreneurship has richly described the characteristics and peculiarities of ethnic businesses catering to enclave markets. However, several indications suggest that immigrant-owned firms are increasingly entering mainstream markets and changing both their internal structures and their external networks with resource providers. One of the most substantial changes, which has been overlooked by researchers, consists of the appearance of what we define as ‘multiculturally hybrid firms’, which are firms that rely on inter-ethnic managerial or labour resources to carry out their activities. Therefore, in this paper we provide an understanding of the variables that affect the recourse to solutions of multicultural hybridism in the entrepreneurial teams and personnel of immigrant-owned firms. We conduct our empirical analyses on data collected through interviews on a sample of 130 immigrant entrepreneurs in Italy. Our results show that multicultural hybridism is mainly driven by the size of the founding team, the business's maturity, the entrepreneurs' host-country language competence and by entrepreneurs' motivation by individual goals rather than community goals. This research advances our knowledge about immigrant entrepreneurship by focusing on firm-level dimensions such as the diversity of entrepreneurial teams and employees, which are increasingly relevant in our multicultural societies.

Keywords::

• immigrant entrepreneurship
• break-out strategies
• organizational diversity

Notes

^1. We define multicultural hybridism as an economic organization where one or more migrant entrepreneurs (1) hire non-co-ethnic employees, or (2) involve non-co-ethnic partners in the ownership or management of the firm.

^2. In the light of recent research which departs from the assumption of cultural exceptionalism of minority firms (Light 2004; Jones and Ram 2007; Jones et al. 2012), we note that some of the developmental issues and barriers to growth faced by minority firms are similar to those encountered by mainstream business owners. This is confirmed by our observations on the growing strategic and organizational complexity of migrant firms, and the need to incorporate a broader set of non-co-ethnic mainstream resources and skills into the firm.

^3. The actual information available is the country of birth of the entrepreneurs.

^4. In particular, we exclude foreign entrepreneurs if they are from the following countries: Andorra, Austria, Belgium, Denmark, Finland, France, Germany, the UK, Greece, Ireland, Island, Liechtenstein, Luxemburg, Malta, Monaco, Norway, the Netherlands, Portugal, Spain, Sweden, Switzerland, Canada and the USA.

^5. Respondents were asked to use a three-point Likert scale: 1 = not important, 2 = fairly important and 3 = most important.

^6. The confirmatory factor analysis indicated a good model fit with a percent of variance explained equal to about 68%, and the Cronbach's alpha is 0.75.

^7. The confirmatory factor analysis indicated a satisfactory model fit with a percent of variance explained equal to about 44%, and the Cronbach's alpha is 0.56.

^8. In this case, for each item, the coded variable is measured on a scale: 0 means ‘I disagree’, 1 means ‘I partially agree’ and 2 means ‘I agree’.

^9. Following the reviewer's suggestion, we checked the sectoral breakdown of our proxy of multicultural hybridism . We found some degree of variance: e.g. average level of multicultural hybridism is comparatively low for ethnic firms operating in retail trade sector. However, additional regressions, including sector dummies as controls show that our results do not alter significantly.