Impact of ethnicity on financing of immigrant businesses
by Sibylle Heilbrunn, Nonna Kushnirovich
International Journal of Business and Globalisation (IJBG), Vol. 2, No. 2, 2008

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.

Online publication date: Fri, 11-Jan-2008

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