This chapter will argue for the development of a network based framework for understanding the formation and success of migrant businesses, based on research in the Republic of Ireland and Northern Ireland. Mixed embeddedness is currently a prevailing theory, which emphasises the legal, political and economic structures which impact migrant businesses in host states. This has been followed by the biographical embeddedness approach, which is more focused on the individual agency of the migrant entrepreneurs. There is a tension between these approaches based on the importance of structures or migrant agency for understanding migrant business. However, based on findings from the empirical research, this chapter will argue for an approach based on the social capital of migrants. Most of the participants stated that an initial lack of contacts was the key challenge facing their business. Deprived of the established networks that many non-migrant business owners possess, migrant businesses in Ireland have struggled. The findings presented will be based on interviews with 41 self-employed migrants from both states. The island of Ireland is particularly fascinating as a case study given the relatively low proportion of migrants which are self-employed. This is even more surprising given the high proportion of non-migrant self-employment. In many countries the reverse is the case. Therefore, it is relevant as a site to analyse the challenges faced by business, but which evidently are the most keenly felt by migrants.
Diaspora and migration entrepreneurship has been investigated by various researchers in the last few decades. Since the rapidly increasing number of migrants and diasporans worldwide engage in transnational entrepreneurial activities, their unique economic activities have considerable impact on the modern world. Diaspora entrepreneurship is a complex and diversified phenomenon by nature. Diasporans refers to migrants and their descendants who have a strong emotional connection to their country of origin (COO). This term, however, comprises people with different motivation, situations and resources. Previous studies have not fully tackled this inherit heterogeneity. Due to lack of exhaustive classifications to reduce the heterogeneity of this phenomenon, findings of studies on diaspora businesses and entrepreneurship in the past are fragmented, which hinders development of common understandings on this topic. Considering weaknesses and strengths of existing classification of diaspora entrepreneurship, I suggest an alternative classification based on different migration directions by focusing countries’ economic situations and discuss characteristics of each type of diaspora entrepreneurship. This classification focuses on the environmental influence on diasporans’ motivation, individual resource as well as collective resources.
Mohammad B. Rana and Maria Elo
The Multinational enterprises (MNE) are viewed as proactive global economic actors that enter new and emerging markets with an intentional strategy building on their inherent resources and firm-specific advantages. However, there are numerous actors involved at market entry-level who may constitute thresholds for the entry. Emerging markets tend to possess complex institutional contexts and thus may incorporate idiographic entry challenges. Our study presents two under-examined types of stakeholders as distinct actors related to emerging market entry process: diaspora and civil society. How did these actors influence the creation of international new venture (INV) – Grameenphone – in Bangladesh and the respective internationalization process? This embedded case study analyses and describes the stages of development, how Norwegian Telenor, American Gonophone, Japanese Marubini and Bangladeshi Grameen Bank created an INV named Grameenphone in Bangladesh, and how diaspora and civil society actors formed the primus motor and organizational capability base for this establishment and internationalization process, – which would not have happened without their market driving and enabling influence. The findings illustrate the central role of diaspora related innovation, motivation, knowledge, network and funding that supported this emerging market INV development. The study contributes to internationalization theory, transnational diaspora entrepreneurship and civil society research discovering their impact as necessary organizational capability for market entry.
Maria Elo and Victor Mollel
Diasporans have been acknowledged as important source of labor, bridge builders for international business and innovation, and agents for institutional change and betterment. The importance of diasporans for international economy as talent flow and economic element is emphasized on the macro-level, while many relevant micro-level aspects of the diaspora business phenomenon have remained underexplored. For example, there is very little understanding how diasporans are approached as customers, as target markets by firms. On the other hand, cultural studies point out how significant cultural aspects and institutions are for diasporans, and in fact, they may form the basis for novel businesses. The case study of Thamel illustrates how diaspora may trigger innovative businesses in which diaspora roles are multifaceted. There are indications that institutions such as funerals and cemeteries are highly specific and relevant even as location advantages for other activities. Final repatriation is a form of return to the homeland. The purpose of the study is to explore how diaspora status in the end of life cycle is conveyed into a business model that targets explicitly diasporans and their particular diasporic needs from a marketing perspective. We ask, what is the role of ‘diasporanness’ in such business? Three case studies that target diasporans and their final repatriation indicate that cemeteries and funeral services are a niche market service that serve the belonging and the diasporic identity, but also relate to the remaining family and its expectations. The findings illustrate that diasporic and religious idiographic features affect the evolution of novel service but that tourisms has also influenced the service development. We suggest that both policy makers and businesses take these final wishes seriously and integrate them into a more holistic life cycle framework.
Iris Koleša and Andreja Jaklič
With economic development depending heavily on accumulation and diffusion of knowledge, highly skilled and well networked entrepreneurial individuals have become crucial for an economy. These carriers of knowledge are increasingly mobile and dispersed, however, which means that countries of origin (COOs) need to develop proper strategies and policies to turn brain drain into knowledge gain. Applying emigrant human capital to a COO’s economic development is a difficult task, as it demands comprehensive understanding of both the mechanisms and success factors behind emigrant engagement and knowledge sharing with the COO. To deepen this knowledge we conduct a cross-country comparative case study covering migration policies and diaspora strategies of four small COOs: Austria, Estonia, Ireland and Slovenia. Our key research question is: How can (small) COOs enhance the application of emigrant human capital to their economic development? We develop a tool for assessing COO approaches to emigrant engagement as well as provide a systematic overview of the existing COO approaches to their emigrant communities abroad, specific COO techniques implemented for transforming brain drain into knowledge gain and barriers hindering emigrant engagement and knowledge sharing with the COO. The latter include: indistinct allocation of responsibility, lack of reliable migration data, negative perceptions of emigrants, underdeveloped institutional capacity, policy fragmentation and coordination issues. Moreover, we discover that a COO’s approach to emigrant communities is contingent on perception and recognition of emigrant community’s value by both the COO’s government and inhabitants, while its success depends on communication clarity, consistency and inclusiveness. We also note that network structure and content (especially in terms of network heterogeneity and strength of ties) strongly influence effectiveness and efficiency of knowledge sharing in the context of international migration. Such impact is found in both the (interconnected) emigrant and institutional networks.
Erez Katz Volovelsky
During the last 23 years, the numbers of Jewish entrepreneurs in Shanghai has increased. In the course of their business activities, the Jews practice and demonstrate their social and cultural capital in various ways. In this chapter, I present the social and cultural capital of the Jewish entrepreneurs in Shanghai.
Maria Elo and Liesl Riddle
Indianna D. Minto-Coy
Increasing light is being shun on the role that diasporas and migrants play in helping to create businesses in their adopted countries. This marks some progress in research and practice away from a deterministic view of diasporas and migrants as agents that are acted upon (e.g. by receiving or adopted country government policies or the very push and pull factors that lead to their creation). This more dynamic depiction paints diasporas as active and purposive transnational agents, a perspective not necessarily facilitated in traditional international business literature. Nonetheless, this emerging body of work still tends to ignore the role that Diasporas play in helping businesses in countries of origin to grow and internationalise. In this way, what has often in the past been framed in a negative (e.g. Migration and the formation of global diasporas as indications of brain drain or chiefly as a concern of sociologists/anthropologists) can be constructed in a more nuanced way, with diasporas providing a ready market and network for home-based firms wanting to enter foreign markets. The implications for exports, productivity and ultimately, national growth are not to be underestimated, particularly in those societies with notable levels of migration. The main question guiding the chapter is: what is the role of diasporas in the growth and internationalisation of businesses from countries of origin? The chapter suggests the diaspora as a key resource and route towards participation and enhanced competitiveness in the global economy for firms originating in countries of origin. This is particularly useful for businesses generally, but more specifically for firms from small and developing nations who have traditionally found it difficult to internationalise, diversify and identify ‘new’ markets.
S. Ram Vemuri
Contemporary discussions of diaspora business do not acknowledge the simple historical fact that neither movement of people nor formations of businesses due to migrations are new phenomena. This presentation traces the significance of migration and the impact of migration on the formation of business in order to contextualize the contemporary phenomenon of diaspora business. The chapter draws from the trends in internal migration and formation of businesses by migrants using India as a case analysis. Based on the analysis of Indian internal migrant populations and business formations, the chapter suggests the need to escape the perception of diaspora business as being a new event. The chapter will conclude with a call for setting up a research project on a global scale to develop an interdisciplinary theoretical model to understand the formation and development of Diaspora business.
To contribute for an improved understanding of transnational entrepreneurship as an area of interest, we conducted a single case study of a Romanian TE with a base in France. We found that through a specific combination of resources the transnational entrepreneur was able to profit from specialized local technological knowledge in his home country and then leveraged relevant resources in the host country. While the transnational entrepreneur founded a firm in the home country, he kept residency in the host country to develop new customer relationships. Subsequently the entrepreneur internationalized his firm and expanded into new business activities. Taking this case as an example, we discuss how transnational entrepreneurs can create and leverage resources to create sustainable competitive advantage. Moreover, this case depicts a form of internationalization which differs from those typically discussed in the literature about international new ventures. I argue that study of transnational entrepreneurs and international new ventures in general can profit from a better understanding of diversity found in transnational entrepreneurship. The way a transnational entrepreneur recognizes patterns to identify business opportunities seems to differ when compared to indigenous entrepreneurs.