This article explores mutual relationships between embeddedness and second-generation ethnic entrepreneurs. We apply an exploratory and inductive qualitative research design to investigate how a dual embeddedness of second-generation immigrants in the ethnic community and in mainstream society influence their entrepreneurial activities and vice versa. Based on multiple cases studies of Vietnamese second-generation ethnic entrepreneurs, we identify four causal relations between embeddedness and entrepreneurial activities: (a) resource mobilisation; (b) formation of entrepreneurial motivation; (c) feedback effect on embeddedness and (d) re-formation of dual identity. This research contributes to the research on ethnic entrepreneurship by showing novel causalities between socio-psychological factors and entrepreneurial activities of second-generation entrepreneurs.

This chapter investigates the interaction between legitimacy and nascent ethnic entrepreneurship in the country of residence. The study relies on institutional theory to demonstrate that host institutions and ethnic institutions play different roles in the early stages of second-generation ethnic entrepreneurship. The qualitative data in this study demonstrate that second-generation ethnic entrepreneurs are firmly embedded in the mainstream community and, therefore, earn proper legitimacy in various industries in the mainstream market. On the one hand, the prevailing connections between entrepreneurs and their ethnic communities provide second-generation ethnic entrepreneurship with the legitimacy to contribute to society. On the other hand, ethnic society legitimates the entrepreneurial activities of second-generation ethnic entrepreneurs because of these contributions. Moreover, the results of this study illustrate the reciprocal process in which institutions recognize the legitimacy of nascent second-generation ethnic entrepreneurship in different contexts.