Title: Impact of ethnicity on financing of immigrant businesses

Authors: Sibylle Heilbrunn, Nonna Kushnirovich

Addresses: Department of Business Administration, Institute for Immigration and Integration, The Ruppin Academic Center, Emek Hefer 40250, Israel. ' Department of Economics and Management, Institute for Immigration and Integration, The Ruppin Academic Center, Emek Hefer 40250, Israel

Abstract: The purpose of this study is to investigate how ethnicity and co-ethnic business dealing affects financing patterns of immigrant entrepreneurs. The study examines differences in financing between immigrant and non-immigrant businesses, investigating whether these differences are caused by co-ethnic business dealing of immigrant entrepreneurs. The target research population consisted of Israeli born and FSU immigrant entrepreneurs who came to Israel between 1989 and 2006. Based on a combination of convenient and snowball samples, 183 FSU immigrant and 244 Israel-born business owners were surveyed. Three groups of entrepreneurs are compared: immigrant co-ethnic entrepreneurs, immigrant non-ethnic entrepreneurs and Israeli born entrepreneurs. Our study revealed that co-ethnic business dealing does not influence start-up funds of immigrant business but does affect the problems encountered when recruiting ongoing funds and accessing trade credit. Co-ethnic business dealing fills in immigrant entrepreneurs| lack of social capital, but does not constitute a competitive advantage for them.

Keywords: immigrant entrepreneurship; financing; co-ethnic business dealings; Israel; ethnicity; start-up funds; trade credit; social capital.

DOI: 10.1504/IJBG.2008.016623

International Journal of Business and Globalisation, 2008 Vol.2 No.2, pp.146 - 159

Available online: 11 Jan 2008 *

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