Objective institutionalized barriers and subjective performance factors of new migrant entrepreneurs

Abstract

Purpose The purpose of this paper is to explain how the “objective” institutionalized barriers (of which social, human and financial capital are decisive factors) and the subjective performance of new migrant entrepreneurs jointly affect their business attitudes and observed behavior. Design/methodology/approach The paper’s analysis of individualized performance factors (dependent on how “objective” institutionalized barriers are subjectively construed) – in line with the theory of planned behavior – enables a response to recent calls to embrace complexity and pluralism in entrepreneurship through applying social constructivist lenses. Semi-structured interviews were conducted with 32 Eritrean entrepreneurs, and the empirical data were subjected to grounded theory analytical procedures and interpretative phenomenological analysis theoretical coding. Findings Six core beliefs mitigated entrepreneurial attitudes independently from the objectivized institutionalized barriers: know-how needs to be acquired formally; available sources of financing are internal, and scarce; market expertise is in the books, rather than in the market; blending in the host country’s culture is uncalled for, and the resulting difficulty of operating in the “foreign” market is a price worth paying; risk is to be avoided at all cost; and strong intra-communal bonds need not entail support for their business activity, rendering external contacts hardly necessary or trustworthy. Originality/value The paper concludes with recommendations potentially informing policies and targeted interventions by highlighting that any policy intervention or an attempt at structural change of conditions in which new migrant entrepreneurship unfolds should consider entrepreneurs as “performing” individuals, as well as representatives of wider cultural, economic and social dynamics relating to these “objective” institutionalized barriers.

Eradicating Poverty and Unemployment: Narratives of Survivalist Entrepreneurs

“…This study underscores the important role that finance plays in the formation and success (or failure) prospects of SMEs (e.g. Opute et al, [in press]; Hagos et al, 2018). From the point of policy and regulations, this study also enhances literature and reinforces the important role that government regulations play in the formation and growth prospects of small enterprises (e.g.…”

“…To support audio recorded evidence, notes were also taken during the interviews (e.g. Opute et al, in press;Hagos et al, 2018). More than 15 questions were put to the business owners.…”

“…Entrepreneurship scholarship has focused immense effort on understanding the influencing factors of entrepreneurship activity (e.g. Kloosterman et al, 2016;Hagos et al, 2018;Opute et al, [in press]). In building the theoretical framing of this research, we weave the review of literature around three core areas that are viewed as critical to survivalist entrepreneurs, namely finance, government influence, and educational background.…”

“…To understand these challenges, this study builds on mainstream entrepreneurship literature and invokes financial capital (e.g. Opute et al, [in press]; Hagos et al, 2018), human capital (e.g. Opute et al, [in press]; Stam et al, 2014) theories, as well government regulations foundation (e.g.…”

“…Scholars have lauded the relevance of financial capital theory to the understanding of entrepreneurial activity (e.g. Opute et al, [in press]; Palamida et al, 2017;Hagos et al, 2018). Within that foundation, lack of capital has featured consistently as a major deterrent to business development.…”