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- Title
Ethnic Business Development: Toward a Theoretical Synthesis and Policy Framework.
- Authors
Ibrahim, Gamal; Galt, Vaughan
- Abstract
This article examines the disproportionate presence of ethnic entrepreneurs. There has been a growing interest in both Europe and North America in the high rate of self-employment among ethnic minority groups. There are a number of seemingly conflicting explanations given as to why some ethnic groups enter self-employment. These range from economic efficiency explanations to more sociological ones that draw on cultural factors. Cultural factors have been considered by many as the causal factors behind the over-representation in self-employment of certain ethnic groups such as the South Asians in Britain. The pioneering work of Ivan Light on protected markets and that on the ethnic enclave of Alejandro Portes and Robert Bach illustrate the significance of ethnic niches based on tight social networks. The main argument underpinning much of the orthodox economic explanation for people choosing to become entrepreneurs is the difference in the expected present value of earnings from self-employment compared with the expected present value of wages from being an employee. An alternative theme stressing the socioeconomic context of markets, in contrast to the reductionist individualism advocated by neoclassical and new institutionalist theories of rational agent, can be seen in the work of Geoffrey Hodgson and Jurgen Lange-von-Kulessa, who have revived the research tradition of American institutionalism, which emphasizes the role of evolution and path-dependence.
- Subjects
EUROPE; NORTH America; EMPLOYMENT of minorities; ENTREPRENEURSHIP; EMPLOYMENT; LIGHT, Ivan; PORTES, Alejandro, 1944-; HODGSON, Geoffrey Martin, 1946-; BACH, Robert; ETHNICITY; ETHNIC groups
- Publication
Journal of Economic Issues (Association for Evolutionary Economics), 2003, Vol 37, Issue 4, p1107
- ISSN
0021-3624
- Publication type
Article
- DOI
10.1080/00213624.2003.11506644