Proceedings of Annual South Africa Business Research Conference
11 - 12 January 2016, Taj Hotel, Cape Town, South Africa, ISBN: 978-1-922069-95-5
Migrant Entrepreneurship in the Outer City of Melbourne: Social
Networks, Motivations and Entrepreneurial Capabilities
Nthati Rametse*, Topoyame Moremong-Nganunu** and Ming Juan Ding***
1
This paper presents findings on migrant entrepreneurship in Australia, focusing on
motivations to business start-up and entrepreneurial capabilities. Using a selfadministered survey questionnaire, we collected data from 200 migrant
entrepreneurs in January – February, 2015 in Melbourne’s suburbs. Findings
revealed the highest mean “push” factor (0.878) – “I had no other option”. The top
mean “pull” factor was “The joy I get from serving others” (0.820). Employing people
from the same cultural background proved the importance of informal social
networks. Assurance of steady supply from suppliers was more important than
suppliers’ ethnicity. Participants possessed three capability variables; opportunity
seeking, innovativeness and pro-activeness. Multiple regression analysis confirmed
that all motivation factors had significant positive effect on these capability variables.
Findings provide important insights into motivations and capabilities of migrant
entrepreneurs in Australia, hence offer policy implications for owners, government
agencies and financial institutions that support migrant entrepreneurship.
Keywords: migrant entrepreneurship, “push” and “pull” motivations, social networks,
opportunity identification, innovation and pro-activeness
1. Introduction
There are nearly 6 million immigrants globally, since 1945 (Collins, 2003). Thus, the past
decades have encountered a global influx of people with different socio-cultural or ethnic
origin. There is no doubt that Australia is a country of immigrants. The 2011 Census of
Population and Housing reported that of Australia's 21.5 million people, about one quarter
were born overseas, with a further 20% of residents having at least one parent born overseas.
Over half (53%) of the population are third-plus generation Australians; those having one or
more of their grandparents who may have been born overseas or who may have several
generations of ancestors born in Australia (ABS, 2013). The upsurge of immigration is
attributable to the effects of globalisation, in the Australian context war in the Middle East, and
other political issues prominent in many countries. Consequently, the government have
devised The Special Humanitarian Program, which is separate to the Migration Program, to
allow people who had been displaced from their home countries due to gross violations of
human rights, to come to Australia (Department of Immigration and Boarder Protection [DIBP]
(2013). In most cases settling in a different country has proved to be a challenge in terms of
unemployment. It has been confirmed that immigrants experience difficulty in finding jobs,
even in times of economic boom, due to their lack of education, their one-sided networks and
discriminatory recruitment procedures (Rath 2000). Consequently, this phenomenon makes
ethnic entrepreneurship a survival strategy of ethnic and migrant populations in contemporary
multicultural societies, such as Australia. Thus migrants should be viewed as a source of new
opportunities for economies. Migrant entrepreneurship is important for the Australian economy
*
Dr. Nthati Rametse, RMIT University, College of Business, School of Management, GPO Box 2476V, Melbourne
3001, Australia. Email. Nthati.rametse@rmit.edu.au
**Dr. Topoyame Moremong-Nganunu, Sultan Qaboos University, Management Department, College of Business
and Political Science, P.O. Box 20, Alkhoud 123, Muscat, Oman. Email: topoyame@squ.edu.om
***Dr. Ming Juan Ding, Monash University, Caufield. Email: mingjuan.ding@monash.edu
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Proceedings of Annual South Africa Business Research Conference
11 - 12 January 2016, Taj Hotel, Cape Town, South Africa, ISBN: 978-1-922069-95-5
as it generates income, output and addresses structural unemployment problems among
ethnic population segments. Migrant entrepreneurship has thus attracted increased attention
from academic researchers, policy makers and practitioners. Flap, Kumcu and Bulder (2000)
relate the attention on migrant entrepreneurship to their better performance in the labour
market, where given their human capital, self-employment provides them with better income
than being employees. Thus, without proper micro policy responses, migrant entrepreneurship
is bound to suffer.
The objective of this study was to investigate what motivates migrants in the outer suburbs of
Melbourne to entrepreneurship, with a focus on “pull” and “push” factors. The current
Australian immigration laws have made migrant entrepreneurship a topical issue. Moreover,
the changing laws on global immigration have resulted in the extent of ethnic groups’ access to
business opportunities. With a few exceptions, ethnic groups belong in general to the lower
socio-economic segment of the Australian cities, due to their lack of education and skills
(Nijkamp, Sahin and Baycan-Levent 2010). This has pushed them into self-employment, a
consequential move which is referred to as ethnic (or migrant) entrepreneurship (Nijkamp, et
al. 2010). This then raises the question: What motivates migrants in Australia to business startup?
The definition of entrepreneurship is controversial. This controversy has mostly focused on the
individual who creates a venture. Some articles seem to discuss personal characteristics
(Carland, Carland and Carland, (1995). Overall, migrant entrepreneurship or ethnic
entrepreneurship refers to “business activities undertaken by migrants of a specific sociocultural and ethnic background or country of orign” (Sahin, Nijkamp and Rietdijk 2009, p.253;
Masurel, Nijkamp, Tastan and Vindigni 2002, p.240). Frederic, O’Connor and Kuratko (2016)
extend ethnic entrepreneurship to include co-ethnic helpers and workers sharing common
national background or migration experiences. As such, this research has adopted these
definitions as their dimensions are mostly covered by the literature.
Migrant entrepreneurship research is under-researched in Australia. Studies seem to focus
more on cultural diversity and difficulties that migrants face in Australia, with the exception of
Collins (2003), who investigated policy responses to immigrant entrepreneurs in Australia, and
Collins (2010) who focused female entrepreneurship on how the impact of ethnic diversity and
gender can be conceptualised. Moreover, as expressed by Nathan and Lee (2013), in
London, studies have explored diversity issues for firms in cities (e.g. Sepulveda, Syrett and
Lyon 2011), whilst Nathan and Lee (2013) further claim their study to be the first large-scale
quantitative analysis they are aware of.
Other studies, for example, Masurel et al. (2002), have pointed out various issues that have
pushed and pulled migrants into entrepreneurship. Amongst these factors, the prominent ones
are racial discrimination in the workplace and unemployment due to language challenges,
particularly proficiency in language of the adopted country (Kloosterman 2000, p.94).
Kloosterman (2000) view of a typical immigrant as distinct from an indigenous population is
having inappropriate educational qualifications or skills, possessing inadequate financial
capital and lacking access to relevant indigenous social networks. Suffice it to say that positive
pronounced circumstances include opportunity identification regarding products and services
lacking in their cultural communities.
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Proceedings of Annual South Africa Business Research Conference
11 - 12 January 2016, Taj Hotel, Cape Town, South Africa, ISBN: 978-1-922069-95-5
Once migrants have established their businesses, capabilities in managing and growing their
enterprises become conspicuous. Thus, the second objective of this research was to
investigate if the dominant migrant entrepreneur groups in Australia have critical capabilities to
manage their enterprises. This had been evaluated in terms of their abilities to seize
opportunities when they arise, innovation skills relating to both managerial innovation and
product innovation and their pro-activeness in terms of business relations with competitors.
This then raises the question: Do migrant entrepreneurs possess opportunity identification,
innovation, pro-activeness capabilities?
Migrant minorities may differ in terms of their reasons for migration, their religion, their
language, their educational attainment, their demographic background and their access to
family business networks.
However, the interaction between culture and migrant
entrepreneurship is complex (Nijkamp, Sahin and Baycan-Levent 2010, p374). Culture, has a
strong impact on entrepreneurship in terms of business chosen, for example, religion and
tradition. This situation may limit migrant entrepreneurial growth. The literature has also
established that certain cultural factors, such as same ethnic background, networking,
communication, same language and culture values play an important role in staff recruitment,
customers and suppliers (Tolciu 2011; Rath 2000; Mora and Davila 2005). Thus, the final
objective of this research was to assess if culture influences migrant entrepreneurship. We
evaluated this situation in terms of language (communication), staff recruitment, customers,
suppliers and product preferences. We then raised the following research question: Do culture
influences migrant entrepreneurs in staff recruitment, customers, suppliers and product/service
preferences?
Our motivations for a migrant entrepreneurship research are as follows. First, studies have
confirmed that immigrants of certain ethnic background had been marginalised and face
discrimination in the Australian society. As Mavrommatis (2015) notes, racism and
discrimination in the labour market has pushed many members of ethnic communities towards
setting up their own businesses to create self-employment. The influx of many foreign migrants
is fraught with serious social tensions caused by a wide variety of negative socio-cultural and
economic externalities (Nijkamp et al. 2010). Likewise, there is a tendency to see migrants
more as a source of problems than as a basis of new opportunities for the urban economy
(Nijkamp et al. 2010). Thus to address these problems, migrant entrepreneurship is worthy to
investigate, in particular the entrepreneurial effects of this growing diversity. Moreover,
globally, migrant entrepreneurs represent a minority of the population of entrepreneurs and
policy makers need to be sensitised of the conditions confronting migrant entrepreneurs.
Additionally, this research has implications for migrant entrepreneurs and financial institutions.
Interestingly, findings of this study differ with those of other studies (for example, Rath 2000;
and Masurel et al. 2002) on the aspect of a “push” factor of discrimination at work. In this
study, migrant entrepreneurs ranked discrimination at work as the lowest “push” factor
amongst other factors. However, this could be attributed to the fact that respondents never
worked, but embarked on entrepreneurship. This needs to be further investigated as the
questionnaire omitted to solicit information on previous employment status of respondents.
This paper is organised as follows.
Section 2 reviews the literature on migrant
entrepreneurship. Section 3 presents the theoretical framework for this study. Section 4
focuses on the research methodology. Section 5 presents results and analysis. Section 6
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Proceedings of Annual South Africa Business Research Conference
11 - 12 January 2016, Taj Hotel, Cape Town, South Africa, ISBN: 978-1-922069-95-5
concludes this paper highlighting policy implications so far as they affect Australian migrant
entrepreneurship.
2. The Literature Review
2.1 Theoretical Underpinning of Migrant Entrepreneurship
Aldrich and Waldinger (1990) note that the word “ethnic” is linked to “group”, with an
implication of members having some awareness of group membership and a common origin
and culture or that others think of them as having these attributes. Thus, in Australia, ethnic
groups are prevalent and tend to have a concentration of businesses around the same
geographical area. Demographics may influence the number of start-ups because certain
types of people are more likely to be entrepreneurs. Nijkamp et al. (2010) confirm that within a
city, foreign activities are usually concentrated in certain geographical clusters. Kloosterman
(2000) argues that ideal-typical immigrants, lacking appropriate educational qualifications and
financial capital, are constrained in the choice of market in which to start their businesses.
Moreover, the typical ventures they set up usually require relatively small amount of capital
outlays, including where technical barriers are low (Kloosterman 2000). Other distinct features
of migrant enterprises are that they are usually at the bottom of the market, where entry is
relatively low, with strong competition from co-migrants and are susceptible to accepting low
profit margins (Shahin et al. 2009). Rath (2000) further note that it is not always good for
immigrant entrepreneurs as many of them do not succeed economically as in most cases they
are involved in low-level entrepreneurial activities. This implies that migrant enterprises are
smaller and unlikely to grow due to obstacles to admission.
Aldrich and Waldinger (1990) further discuss the “subcultural dimension of ethnicity – the
social structures through which members of an ethnic group are attached to one another and
the ways in which those social structures are used” (Aldrich and Waldinger 1990, p112). Rath
(2000) notes that, although immigrant entrepreneurs work long hours in most cases, assisted
by family, co-ethnics or other immigrants, they often make minimal profits. Moreover, this
phenomenon has driven immigrant entrepreneurs into illegal practices such as tax evasion and
undocumented employment of other immigrants (Rath 2000). With a few exceptions, ethnic
groups belong in general to the lower socio-economic segment of European cities, due to their
lack of education and skills (Nijkamp et al. 2010), a situation which is prevalent in Australia.
This has pushed them into self-employment, a consequential move which is referred to as
ethnic (or migrant) entrepreneurship (Nijkamp et al. 2010).
Evidence suggests that a majority of immigrant entrepreneurs, particularly those born in Asia,
have a higher rate of involvement in international trade than non-immigrant entrepreneurs
(Collins 1998). Moreover, some immigrant entrepreneurs settled in Australia with enough
capital and resources to start their enterprises. These entrepreneurs do not experience
significant hardship. The policy response of these classes of immigrant entrepreneurs, such
the Australian 1976 Entrepreneurial Migration Category, has made a smooth transition of this
class of migrant entrepreneurs. Migrant entrepreneurs with detailed business proposals and
$200,000 capital were opportune to enter Australia. The Entrepreneurial Migration Category
was later renamed the business skills category, which enabled more than 16,000 immigrants
and their 69,000 dependents to enter Australia, a majority coming from Asian countries (Collins
2003). Thus Australia continued to make tight policies, such as assimilation policy that
impacted significantly on immigrant minorities in Australia. Assimilation policy denied new
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Proceedings of Annual South Africa Business Research Conference
11 - 12 January 2016, Taj Hotel, Cape Town, South Africa, ISBN: 978-1-922069-95-5
immigrant minorities some opportunities and access to education, health and social welfare
and the law (Collins 2003). Racism was prevalent in the workforce, hence pushed many
immigrants to start businesses. Assimilation was replaced by multiculturalism, which resulted
in programs that assisted in the recognition of overseas qualifications (Collins 2003). Taxation
also impacted heavily on immigrant entrepreneurship. This resulted in tax evasion of immigrant
entrepreneurs.
Thus, it can be established that there are two types of immigrant entrepreneurs: Those who
settle with enough capital and other resources to start and grow their enterprises and are
therefore pulled into entrepreneurship by such opportunities; those who face challenges such
as unemployment and language difficulties, and are consequently pushed into
entrepreneurship. Professional entrepreneurs such as medical doctors, accountants, etc may
go into private practice, although it has been proved that overseas qualifications are a barrier
for entry into these kinds of professions (Mitchell and Castles, 1989). Kloosterman (2000) note
that not all immigrants from less developed countries conform to idea-typical immigrants noted
earlier in this paper. Some immigrants who are very educated and highly skilled start
businesses at the upper end of the market, hence do not differ much from highly educated
indigenous entrepreneurs or immigrants from advanced countries (Kloosterman 2000, p.95).
Rath (2000) supports this notion, that numerous immigrants, making use of their own capital
and favourable economic conditions, successfully start their ventures. Kloosterman and Rath
(2001) associate these with software specialists from China and India who have become very
important entrepreneurs. Three basic explanatory models on why migrants opt for
entrepreneurship are classified by Jenkins (1984), cited by Sahim et al. (2009, p.253) as:
i. The economic opportunity, which sees migrant minority businesses as relying on the
market for their success.
ii. The culture model, which assumes that some cultures predispose group members
towards the successful pursuit of entrepreneurial goals.
iii. The reaction model, which assumes that self-employment amongst members of migrant
minority groups is a reaction to racism and blocked avenues of social mobility, a means
of surviving on the periphery of a white-dominated society.
Sahim et al. (2009) explanatory models fits well within the “pull” and “push” factors to migrant
entrepreneurship.
2-2 Micro Environment for Migrant Entrepreneurship
2-2-1 Communication and product/service influence
In Australia, ethnic group size and linguistic isolation among the workforce have enhanced
migrant entrepreneurship. Mora and Davilla (2005), note that the size of foreign-born
population in that country appears to open entrepreneurial opportunities for ethnic business
owners because they understand the product preferences and the language of their fellow
consumers. Thus, communication and the product influence ethnic entrepreneurship. This
issue had been prior conceptualised by Evans (1989) on how majority-language fluency
relates to self-employment in regions characterised by large numbers of fellow-ethnics. At the
extreme end, immigrants in regions with high concentrations of co-ethnics that are mostly
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Proceedings of Annual South Africa Business Research Conference
11 - 12 January 2016, Taj Hotel, Cape Town, South Africa, ISBN: 978-1-922069-95-5
associated with their countries of origin, such as those lacking majority language fluency face
discrimination (Davila, Bohara, and Saenz 1993).
Mora and Davilla (2005) view this conceptualisation both at a micro and macro level, the micro
level being that immigrants have more entrepreneurial opportunities in areas of large co-ethnic
presence because they have the language and cultural tools to better communicate and
effectively conduct business. Furthermore, Evans (1989) extends this notion that immigrants
proficient in the host country’s majority language would be able to tap into the product and
factor markets of both the foreign-born and native born populations. At a macro level, the
growing intolerance of linguistic pluralism at a national level might push immigrants lacking
majority language skills to self-employment due to diminished employment opportunities (Mora
and Davilla 2005). Thus, if public policy reduces the information and services assessable to
non-majority languages, such as decreasing the availability of multi-lingual printed materials,
the importance of majority language in a particular region could increase. This situation is
bound to increase migrant entrepreneurship.
Generally, migrants’ communities may not find products and services from their country of
origin in the host country. Consequently, they find a niche in their community in order to
provide typical services and products. Green and Owen (2004) discuss the middleman minority
theory, which suggests that broadly, the emergence of ethnic enterprises within a community is
a sufficient number of potential customers of ethnic products.
2-2-2 Staffing
Generally, migrant entrepreneurs hire people with co-ethnic background for various reasons,
such as proficiency in the host country’s language as well as ethnic language. As Tolciu
(2011) notes, this is mainly for creation of a common ground, in order to facilitate cooperation
in the workplace as well as to decrease costs associated with communication. Thus in an
English speaking country like Australia, it can be assumed that migrant entrepreneurs have no
other option but to hire migrant employees who are proficient in both English and their ethnic
language. McPherson (2008) view is that it differs according to the sector of activity and
educational background of the owner. However, the cultural and ethnic approaches assume
that migrant entrepreneurs follow and are bound by economic considerations (Tolciu 2011).
There is a general agreement that through informal co-ethnic networks, migrant entrepreneurs
have access to family and extended family labour and this has provided flexibility (McPherson
2008). These include benefits of family and extended family being prepared to work long
hours, being easier to control and manage. Earlier on, Carlson, Lipton and Seaman (2006)
found that for family-owned SMEs, attracting and retaining strong non-family executives were
barriers to entrepreneurial success and growth. Thus, migrant entrepreneurs’ family
employees may be more loyal than migrant entrepreneurs’ non-family employees.
Carlson et al. (2006) found that due to financial constraints of their businesses, labour law
compliance and the recruitment process was an issue for migrants’ family-owned businesses.
For example, respondents cited trust and obligation as important for them, as first-generation
migrant business owners were more likely to recruit and employ family members in key
positions. This was irrespective of their skill level and not recording their wages. Additionally,
they were more likely to employ co-ethnic labour (Carlson et al. 2006).
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Proceedings of Annual South Africa Business Research Conference
11 - 12 January 2016, Taj Hotel, Cape Town, South Africa, ISBN: 978-1-922069-95-5
2-2-3 Suppliers and customers
Tolciu (2011) asserts that when focusing on certain customers or choosing adequate suppliers,
migrant entrepreneurs tend to be more concerned with their economic considerations than with
ethnic background. Thus, migrant entrepreneurs seem to be both demand and supply
oriented. On one hand, they attempt to find ways of satisfying and increasing their clientele
and on the other hand, they concentrate on suppliers who provide low cost, quality products
regardless of their nationality/ethnicity (Tolciu 2011). Notably, discrimination from customers
may also be problematic for diverse or migrant/minority firms to commercialise their inventions
successfully (Nathan and Lee 2013).
2-3 Social Networks
Various studies have discussed the view that immigrant entrepreneurs’ success depend on
their networking or their relation with their home country (Kloosterman & Rath 2001). The
term “network”, in entrepreneurship literature, is associated with support structures and
personal contacts of entrepreneurs. As Sahin et al. (2009) note, “social networks have a wider
cultural dimension”, inclusive of culturally-induced values, attitudes and behaviour” (Sahin et
al. 2009, p.260). This cultural notion suggests the availability of ethnic resources to assist
immigrant entrepreneurs in their venture creation. Sahin et al. (2009) also expound on the
networking and social network perspective, where the network perspective focuses on
studying “the network of relationships between individuals, groups and organisations, whereas
social network perspective emphasises the relationships between individuals” (Sahin et al.
2009, p.260). Overall, Massey (1989) define migration network as a set of entrepreneurial ties
that link immigrant, former immigrant and non-immigrant in origin and destination area through
the bond of kinship, friendship, and shared community origin. Networking does not only occur
within the host country, but could take the form of transnational networking, where activities
bridge national boarders by migrant entrepreneurs’ keeping in contact with their homeland
(Salaff et al. 2003). This is basically for information sharing, contacts and trust. This
phenomenon keeps the “ball rolling” for migrant entrepreneurial activities. Moreover, as
Nathan and Lee (2013) note, through the exchange of knowledge, co-ethnic networks may
reduce information and communication costs.
The literature has also classified entrepreneurial networks into formal and informal networks.
Informal networks consist of personal relationships, families and business contacts; and formal
networks comprise of professionals such as accountants, lawyers, banks, etc (Sahin et al.
2009). Migrant enterprises are found to be small in terms of start-up capital, utilised labour,
growth capital and turnover; They find a niche in their community in order to provide typical
services and products; they have close relations with their own migrant group in terms of the
workforce and business financing; they also acquire financial capital and loans from their
informal networks; they are less likely to receive bank funding than native entrepreneurs; they
often borrow capital from family or other group members (Nijkamp et al. 2010, p374). Sahin et
al. (2009) note that in the Netherlands, although native entrepreneurs borrow their capital from
a bank, migrant entrepreneurs usually obtain start-up capital from their relatives, such as
parents, brothers, sisters, uncles and aunts. Overall, social bonds in a cultural network create
flexible ways to attract personnel and capital (Masurel et al. 2002). Consequently, problematic
unemployment of young people in ethnic segments may be resolved (Masurel et al. 2002). It
is without doubt that the role of informal networks is often seen as a critical factor in migrant
entrepreneurship.
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Proceedings of Annual South Africa Business Research Conference
11 - 12 January 2016, Taj Hotel, Cape Town, South Africa, ISBN: 978-1-922069-95-5
2-4 Migrant Entrepreneurship Motivation Factors
Mavrommatis (2015) researched ethnic entrepreneurship in the UK, and points out Ram et al’s
(2010) assertion that South Asian populations or at least some of them are prone to business
and entrepreneurship because of their distinct culture. Kloorsterman (2010) note that as
opposed to a focus on the heroic role of the individual entrepreneur, that is prominent in last
quarter of the twentieth century literature, the wider societal context had to be implored
because some groups of immigrants were pushed to start their own ventures due to obstacles
such as discrimination. Mostly, the literature has disentangled motivations to entrepreneurship
comprising the “push”and “pull”factors (Rametse and Huq 2014). Moreover the “pull” and
“push” factors to ethic entrepreneurship had also been explained. The “pull” factors are
positive motivations to ethnic entrepreneurship, while the “push” factors represent structural
limitations that drive immigrants to ethnic entrepreneurship. The “push” factors are primarily
“elements of necessity” (Orhan and Scott 2001), such as racism and discrimination in the
labour market. Racism is also viewed as part of everyday business life (Ishaq, Hussain and
Whittam 2010), implying that, once pushed into entrepreneurship and established their
businesses; ethnic entrepreneurs continue to deal with racism. Overall, the literature has
covered the following as motivations to migrant entrepreneurship.
Pull factors: to be independent, to be their own boss, to have extra income or make money, to
gain some work experience, the possession of a business idea, dissatisfaction with their
previous job, need for flexibility, want to make a career, or ideological reasons (desire to
innovate), and the existence of migrants as social networks.
Push factors: their lower level of education, their less favoured position due to low education
and lack of skills, unemployment, racial discrimination at work, etc. Rath (2000) argue that
apart from societal racism in general, the exclusion of immigrants from the economic
mainstream pushes them toward entrepreneurship.
Mavromatis (2015, p93) argues that as opposed to contemporary stories of migration, which
tend to present it as a draining of public resources by outsiders….. migration contributes not
only the economic advancement, but also to the broader societal development of any recipient
country. In the USA, the declining labour market opportunities in the presence of rising
xenophobia in the late 1910s and 1980s induced a relatively large share of limited English
proficient migrants into self-employment.
Job scarcity or lower wages within ethnic enclaves induced by discrimination have pushed
members of discriminated groups into self-employment (Mora and Davilla 2005). Thus the
structural lack of economic alternatives pushes migrants to self-employment (Rath 2000).
Sriram, Mersha and Herron (2006) researched factors that lead to the creation and sustenance
of successful small and medium-sized enterprises in the US inner cities and found motivation
and skills to drive entrepreneurial behaviour.
2-5 Entrepreneurship Capabilities
2-5-1 Opportunity identification
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Proceedings of Annual South Africa Business Research Conference
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Nijkamp et al. (2010) found that insight into individual entrepreneurial behaviour of migrants is
essential to develop an urban business culture in which migrants are no longer a source of
problems, but of great economic opportunities for all parties concerned. Aramand and Vallliere
(2012) view changes in customer needs and competitive products to be the major source of
opportunities. Additionally, in order to succeed in the short term, entrepreneurial firms need
entrepreneurial capabilities to identify and exploit opportunities in the environment and in the
long-term dynamic capabilities are needed (Aramand and Valliere 2012). Exploiting these
opportunities may require the firm to develop a new product or method of product. This
suggests that migrant entrepreneurs’ ability to innovate and being proactive is essential for the
sustenance and growth of their enterprises.
Opportunities occur for both indigenous and migrant businesses and entrepreneurs seize
them. Kloosterman and Rath (2001) note that opportunities on the demand side of a fictitious
market, to run an enterprise economically are evident and these opportunities have to be
accessible for the aspiring entrepreneurs. Kloosterman (2010) sees markets as a crucial
component of an opportunity structure. One of the opportunity structures consist of market
conditions, which give rise to a need for ethnic consumer products. However, notably, these
opportunities can be blocked due to businesses requiring large outlays of capital and rules and
regulations for entry into markets for new comers may also block opportunities (Kloosterman
and Rath 2001). These opportunities have to be seized by potential entrepreneurs actually
starting their ventures (Kloosterman and Rath 2001). Kloosterman (2010) also notes the
chances for expansion of the inexperienced businesses as an important characteristic of the
opportunity structure. With modest financial means, it is questionable if markets are open to
immigrant entrepreneurs (Kloosterman (2010). Guerra and Patuelli (2014) suggest that
concentration of ethnic groups in specific areas enhances opportunities for immigrants to start
and own businesses.
2-5-2 Innovation
Innovation plays a large role either in the presence or absence of entrepreneurship (Lee and
Petersen 2000). Moreover, diverse teams are seen as more effective than homogeneous
teams in problem solving or generating new ideas, both in products and processes (Nathan
and Lee 2013). Aldrich and Waldinger (1990) point out that entrepreneurial dimension of
innovation and risk are salient when examining ethnic businesses, as most businesses tend to
replicate and reproduce old forms. Risk-taking is seen as “a trait that distinguishes
entrepreneurs from non-entrepreneurs and may positively influence innovativeness, especially
product innovation (Sahin et al. 2009). An earlier study (Sriram, Mersha and Herron 2006),
found that motivations to venture creation are influenced by certain traits, such as innovation
and risk propensity. However, Nijkamp et al. (2010) note that migrant entrepreneurs have to
work in an unfamiliar and risky business environment, and as such, they tend to take riskavoiding attitude, hence focus on traditional market segment, such as markets for ethnic
products.
Nathan and Lee (2013) suggest that large or established firms often generate large amounts of
patent activity, whilst small and/or new firms may introduce disruptive innovations. Disruptive
innovations is a process where the product or service may start in less complicated manner, at
the bottom of a market and moves up market, thereby displacing established competitors.
Nathan and Lee (2013) found that in London firms, all-migrant owners/partners give weaker
links to product/service innovation. As regards process innovation, migrant-run firms play
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important roles and are 1.64 times more likely to introduce new ways of working (Nathan and
Lee 2013, p.379).
In contrast to Aldrich and Waldinger (1990), it is thus questionable if ethnic entrepreneurs do
break new ground in products, process and administration. Whilst resilience on the social
networks of migrant entrepreneurs’ own socio-cultural group may guarantee a certain market
share, at the same time it may hamper an outreach strategy towards new and innovative
markets (e.g. high-tech) (Nijkamp et al. 2010). Thus where concentration is on a limited
market, it has potential to increasing business failure.
Nathan and Lee (2013) also see the success of commercialisation of migrant entrepreneurs’
innovation as related to discrimination from customers. Thus, if migrants were pushed into
entrepreneurship due to discrimination, they may not embrace innovation.
2-5-3 Pro-activeness
Pro-activeness is one of the antecedent variables within the entrepreneurship construct which
are drawn from the trait, social entrepreneurship and behaviour approaches to
entrepreneurship (Jones and Dimitratos 2004).
Lumpkin and Dess (2001) define
proactiveness as “opportunity-seeking, forward-looking perspective involving introducing new
products or services ahead of the competition and acting in anticipation of future demand to
create change and shape the environment” (Lumpkin and Dess 2001, p.341). Generally, proactive innovations are evident in entrepreneurial firms, particularly in moving ahead of
competitors. Moreover, migrant entrepreneurs must be pro-active in establishing links and
networks.
3. Theoretical Framework and Hypotheses
Largely, we note that migrant entrepreneurs are either pulled (positive motivations) or pushed
(negative motivations) into venture creation. We therefore assume that migrants with positive
motivations to venture creation will have higher capabilities than those with negative
motivations. We endeavoured to assess this phenomenon in terms of their ability of seize
opportunities when they arise, innovation management (managerial innovation and
product/service innovation); and their pro-activeness in terms of business relations towards
competitors. Based on these situations, we propose that migrant entrepreneurs’ motivations to
start businesses are either positively or negatively related to entrepreneurial capabilities,
hence offer the following hypotheses:
H1a: Migrant entrepreneurs who were pushed into venture creation will have positive effect on
managing innovation
H1b: Migrant entrepreneurs who were pushed into venture creation are positively related to
identify and seize opportunities when they arise
H1c: Migrant entrepreneurs who were pushed into venture creation will positively effect on proactive toward competitors
H2a: Migrant entrepreneurs who were pulled into venture creation have positive effect on
managing manage innovation
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H2b: Migrant entrepreneurs who were pulled into venture creation are positively related to
identify and seize opportunities when they arise
H2c: Migrant entrepreneurs who were pulled into venture creation will have positive effect on
pro-activeness toward competitors
H3a: Migrant entrepreneurs who started businesses because of their aspiration to be their own
bosses are positively related to manage innovation
Figure 1 shows the relationship between motivation factors of migrant entrepreneurs and their
entrepreneurial capabilities.
Figure 1. Model of Motivation Factors and Entrepreneurial Capabilities
Motivation
Entrepreneurship Capabilities
H1a
Negative Motivation
Innovation
H1b
H1c
H2a
Opportunity seeking
Positive Motivation
H2b
H2c
H3a
H3b
To be my own boss
Pro-activeness
H3c
4. Research Methodology
This quantitative research attempts to answer the questions: What motivates migrants in
Australia to business start-up? Do migrant entrepreneurs possess opportunity identification,
innovation, pro-activeness capabilities? Do culture influences migrant entrepreneurs in staff
recruitment, customers, suppliers and product/service preferences?
Participants
Data were collected in January – February, 2015 using a survey questionnaire. The
researcher identified the common cities of Melbourne where migrant enterprises were
concentrated. Due to the researchers’ diverse ethnic background, they were aware of the
geographical areas where migrant entrepreneurs were concentrated. The selected cities were
Footscray, Dandenong, Springvale and Noble Park. A questionnaire survey was used to
collect data from migrant entrepreneurs as this data collection method was viewed to be cost
effective in terms of taking less of the researcher’s time and more reliable.
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Measurement/Instruments
The migrant entrepreneurship questionnaire (MEQ) was developed for the purpose of this
study. We conducted a pilot study on five migrant enterprises and entrepreneurship experts for
comments and suggestions in order to ascertain the validity of MEQ. We identified
problematic questions that were misunderstood, hence refined the questionnaire and
developed a final instrument. The MEQ was divided into four sections. Section A solicited
basic information (demographics) on the business. This section also requested respondents to
provide their ethnic background through the level of their spoken English and other language
proficiency. Other language spoken may be a better dimensional measurement than the
former. However, this may be overlapping as this measure does not allow for identification of
Australia-born minority communities (Nathan and Lee 2013).
Section B focused on customers and suppliers. On a 7-point Likert Scale, respondents were
requested to rank the extent of various variables when they employ staff. These included
employing staff from the same ethnic background, good networking, ease of communication,
same culture and values and same language. Additionally, information on the scope of these
variables when targeting customers was solicited. Finally, respondents were asked to state
the level of certain variables, such as suppliers of products from home country, price
negotiation, assurance of steady supply, etc. when choosing suppliers.
Section C requested respondents to state on a 7-point Likert scale motivations on starting their
businesses, with a focus on “push” and “pull” factors. Section D required respondents to
identify on a 7-point Likert Scale, the extent of the following entrepreneurship factors: their
ability of seize opportunities, their innovative skills regarding managerial and product/service
innovation and their pro-activeness to their business relations toward competitors.
Procedure
The MEQs were hand delivered by the researchers to 200 enterprises in January, 2015.
Participants were requested to complete the questionnaires and were advised that the
researcher would collect them after one week from the date of delivery. Responses were
received from 157 migrant entrepreneurs. The rate of response, after allowing for out-of-frame
responses was 79 per cent. Administering the questionnaire required about 60 hours, of which
around 20 hours were on driving to and from the businesses; and the rest of the hours were
spent on hand-delivering and picking up the questionnaires. The entire data collection was
conducted by the unpaid researchers at no financial cost. This would have cost around
AUD$2,500 of labour had we hired a research assistant to distribute and collect the
questionnaire.
We used the Statistical Package for Social Sciences (SPSS), version 21 to analyse the results.
Statistical computation included descriptive statistics and the principal component analysis.
The descriptive statistics summarised respondent’s profile (See Table 1). The business’s
employment status and cultural factors (for example, how cultural factors influence staff
employment, targeting customers, and choice of suppliers) were analysed with the means and
standard deviations. The Exploratory Factor Analysis (EFA) was then employed to identify the
main constructs of motivation factors and migrants’ entrepreneurship capabilities. The three
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factors for Motivation Factors explained 74 percent of the variance after deleting one item
subsequent to the second running of EFA. The three factors for Entrepreneurial capabilities
explained 74.7 percent of the variance after running of the EFA for the first time. The results of
EFA shown in Table 9 further confirm the content validity of the items we extracted from the
broad literature review (See Table 7).
Furthermore, the correlation and reliability test were conducted to test unidimensionality,
reliability, convergent validity and discriminant validity of the items and main constructs
(Hair,Blac, Babin, Anderson, and Tatham 2006). The Cronbach’s α of all main constructs for
the motivation factors and entrepreneurship capabilities were greater than 0.801 indicating the
high reliability of the constructs (Anderson and Gerbing 1991). Lastly, the multiple regression
analysis was conducted to explore the casual relationship between the two sets of variables,
including independent variables: Negative Motivation, Positive Motivation and “To be My Own
Boss”, and dependent variables: Innovation, Opportunity Identification and Pro-activeness (see
Table 12).
5. Results/Analysis
5-1 Respondents’ Age, Length of Business Operation and Location
As shown in Table 1, the age of the respondents ranged from 18 – over 45 years old. A
majority (29 per cent) were from the age range of 36-40 years old, followed by 41-45 years old
(24 per cent). Thus the migrant entrepreneurs represented mature people. Additionally, a
majority (52 per cent) were fairly new enterprises as there had been operating for less than 5
years.
A majority of these businesses were located in Footscray (47 per cent), followed by
Dandenong (44 per cent). Thus, at a micro level, entrepreneurship opportunities are prominent
in areas of large co-ethnic presence as migrant entrepreneurs have cultural tools to
communicate and conduct business effectively (Mora and Davilla 2005).
5-2 Level of English Spoken
Participants were requested to rank their level of spoken English on a scale Excellent (5), Very
Good (4), Good (3), Not Good (2) and Do not speak English at all (1). A majority of migrant
entrepreneurs were proficient in English language as they ranked their spoken English at very
good (41 per cent) and excellent (34 per cent), respectively. This could be attributable to that
English was the medium of instruction for most of the respondents’ schools in their home
countries (for example, Ethiopians and Sudanese).
Most of these migrant entrepreneurs spoke both Arabic and Ethiopian languages (29 per cent),
followed by Sudanese language (28 per cent), Ugandan (21 per cent), Vietnamese (20 per
cent), Punjabi (17 per cent), Hindi (15 per cent) and Dari (10 per cent (see Table 1).
Table 1: The respondents’ profile
Characteristics
Sample
Age
18-25 years n=6 (4%)
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26-30 years n=14 (10%)
31-35 years n=27 (17%)
36-40 years n=45 (29%)
41-45 years n=37 (24%)
Over 45 years n=27 (17%)
How long has business been operating
Less than 5 years n=81 (52%)
5-10 years n=46 (29%)
11-20 years n=25 (16%)
Over 20 years n=25 (16%)
Location of business (suburb)
Footscray n=74(47%)
Dandenong n=69 (44%)
Springvale n=7 (5%)
Noble Park n=7 (5%)
Level of English spoken
n=53(34%) – excellent
n=64 (41%) – very good
n=38 (24%) – good
n=2 (1%) – not good
Language spoken
Ethiopian n=46 (29%)
Ugandan (Omoro) n=33 (21%)
Somalian n=12 (8%)
Arabic n=46 (29%)
Sudanese n=44 (28%)
Chinese n=8 (5%)
Dari n=16 (10%)
Greek n=2 (1%)
Punjabi n=26 (17%)
Hazaragi (Persian) = 2 (1%)
Hindi n=24 (15%)
Korean n=2 (1%)
Laos n=1(.6%)
Spanish n=4 (3%)
Vietnames n=31(20%)
Sri Lankan n=2 (1%)
5-3 Business Structure and Main Business Activity
As shown in Table 2, a majority of migrant entrepreneurs operated their businesses as sole
traders (62 per cent, followed by partnership (24 per cent) and company (12 per cent). The
structure confirms that these represented small business as per the Australia Bureau of
Statistics (ABS 2001) classification that:
“Small businesses tend to have the following management or organisational characteristics:



independent ownership and operations;
close control by owners/managers who also contribute most, if not all the operating
capital; and
principal decision-making by the owners/managers” (ABS 2001).
The main business activities operated were retailing and food (39 per cent and 27 per cent,
respectively). The third was service industry at 20 per cent (see Table 2).
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Table 2: Business Structure and Main Business Activity
Legal Structure and Business Activity
Number of
Respondents
Legal Structure:
Sole trader
Company
Partnership
Non-profit organisation
Trust and other
n=98 (62%)
n=18 (12%)
n=37 (24)
n=2 (1%)
n=2 (1%)
Business Activity
Wholesale
Manufacturing
Retailing
Transport
Food
Construction
Tourism
Property
Service
n=5(3%)
n=7 (5%)
n=61 (39%)
n=4 (3%)
n=43 (27%)
n=2 (1%)
n=3 (2%)
n=1 (1%)
n=31 (20%)
5-4 Culture Factors
5-4-1 Business’ employment status
As per Table 3, sixty one (61) per cent of migrant entrepreneurs confirmed that they employed
staff other than their families. Additionally a majority of the entrepreneurs (92 per cent),
employed full time staff of between 1-5 people, representing micro businesses, as per the
Australian Bureau of Statistics’ (ABS 2001) classification, indicative of their involvement in low
level activities expressed by Rath (2000). A majority of respondents (59 per cent) also
confirmed that their employees were from the same migrant business owners’ ethnical
background (see Table 3). This confirms a subcultural dimension noted by Adrich and
Waldinger (1990) that members of ethnic groups are attached to one another and use their
social structures in various ways. In terms of the labour market, co-ethnic employment
facilitates cooperation in migrants’ enterprises and decrease communication costs (Tolciu
2011). Moreover, employing people from the same cultural background supports the
importance of informal networks for migrant entrepreneurs (Sahin et al. 2009).
Table 3: Employment status
Staff employment other than family
Yes n=96 (61%)
No n=56 (36%)
Full time employment equivalence
1-5 people n=121 (92%)
6-20 people n=6 (4%)
Over 21 people n=4 (2%)
Staff of the same ethnical background with owner
Yes n=93 (59%)
No n=39 (25%)
Respondents were requested to indicate the extent to which they were influenced by their
ethnic background, good networking and ease of communication when employing staff. This
suggests that a high mean score reflects that a particular item was considered vital. Table 4
summarises the responses.
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Table 4: Cultural Influence on Staff Employment
N
Mean Std.
Deviation
Ease of communication
137 5.883 1.640
Same culture and values 137 5.379 1.999
Good networking
138 5.341 1.654
Same language
141 5.049 2.385
Ethnic Background
137 4.481 1.871
As depicted by the descriptive statistics in Table 4, the top three factors, with the highest
means, that influenced Australian migrant entrepreneurs when employing staff were ease of
communication (5.883), same culture and values (5.379) and good networking (5.341). On the
contrary, the lowest means were ethnic background (4.481) and same language (5.049).
Overall, entrepreneurial opportunities are prevalent for ethnic business owners because they
understand the language of their fellow consumers (Mora and Davilla 2005).
5-4-2 Targeting customers
Respondents were requested to indicate the extent to which the same language, customer’s
ethnic background, same culture, similar religious background and catering for unmet needs of
customers from the same background was important to them when targeting customers (
Table 5).
Table 5: Cultural Influence on Targeting Customers
Catering for unmet needs of customers from same culture
Same language
Customer’s same culture
Similar religious background
Ethnic Background
N
Mean
156
155
155
155
153
4.948
4.909
4.690
4.652
4.548
Std.
Deviation
2.307
5.382
2.406
2.519
2.288
The descriptive statistics indicate that the highest means of factors that were important for
Australian migrant entrepreneurs when targeting customers were catering for unmet needs of
customers from the same culture (4.948), same language (4.690). The lowest means were
ethnic background (4.5484) and similar religious background (4.652).
5-4-3 Choosing suppliers
Respondents were also requested to indicate the extent to which certain factors were
important to them when choosing suppliers. These included suppliers of products from their
home country, price negotiations, assurance of steady supply, suppliers who meet their needs
and support of suppliers from country of origin (see Table 6).
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Table 6: Choice of suppliers
Assurance of steady supply
Suppliers who meet needs
Price negotiation
Suppliers from country of origin
Suppliers of products from home country
N
Mean
149
149
150
149
150
5.530
5.436
5.180
4.698
4.473
Std.
Deviation
1.858
1.967
1.896
2.223
2.009
The highest three means, as indicated by descriptive statistics, show that Australian migrant
entrepreneurs’ choice of suppliers were influenced more by assurance of steady supply
(5.530), suppliers who meet their needs (5.436) and price negotiation (5.180). On the
contrary, the lowest means were suppliers of products from home country (4.473) and
suppliers from country of origin (4.698). This supports Tolciu (2011) assertion that migrant
entrepreneurs delve more in their economic concerns than their ethnic background. Thus,
assurance of steady supply will create good clientele for migrant entrepreneurs.
5-5 Migrant Entrepreneurs’ Motivations to Business Start-up
After reviewing the literature, we identified some “push” and “pull” factors that are prominent in
migrant entrepreneurship in Australia (see Table 7).
Table 7: Push Motivation Factors for Migrant Entrepreneurs
Push
To sell products need by people from my cultural background;
A need to combine work and family; A need to support people from my cultural
background; A need to support my large family; Unemployment; Lack of
sources of income; I had no other option; Poor education for a job; Poor
English skill for a job; and Discrimination at work
References
(Vinigni 2000; Rath 2000;
Ishaq
et
al.
(2010);
(Kloosterman
2000;Vinigni
2000); (Rath 2000); Collins
(2003); and Sahin et al.
(2009
Pull
The availability of finance; I want to be my own boss; Possession of a business
idea; The joy I get from serving others; The window of opportunity I saw; The
supportive family that I have; The availability of labour; and The experience I
possess
(Sahin et al. 2009); Davila,
Bohara, and Saenz (1993);
Mora and Davila (2005);
Guerra and Patuelli (2014).
5-6 Migrants’ Entrepreneurship Capabilities
The respondents identified the following entrepreneurship factors that related to opportunity
identification, innovation and pro-activeness capabilities (see Table 8).
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Table 8: Migrant Entrepreneurs Capabilities
Opportunity identification
I am always on the lookout for opportunities to make money; I act quickly if I see an
opportunity; I always view problems as potential opportunities; and I will take an
opportunity even if it appears risky
References
Nijkkamp
et
al.
(2009);
Aramand
and Valliere (2012);
Kloosterman (2010;
Kloosterman
and
Rath (2001)
Managerial innovation
Employees are rewarded for their new ideas; Employees are encouraged to see new
ideas as opportunities; Management constantly seeks to develop new ideas; and
We do not mind spending money in finding products or enhancing them
Nathan and Lee
(2013); Adrich and
Waldinger (1990)
Product innovation
We prefer to be the first in the market with new products/services; We constantly modify
our products/service to better serve customers; Our new product/service introductions
have caused significant changes in the industry; and Our business is prepared to do
things that are totally new in our industry
Pro-activeness
Normally we want to do the best compared to other businesses in the same industry;
Our business is very often the first to introduce new products/services, administrative
systems and methods of production; and Normally competitors react towards the
changes that we initiate in our business
Nathan and Lee
(2013); Aldrich and
Waldinger (1990);
Lumpkin and Dess
(2001).
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5-7 Correlation Matrix and Multiple Regression Analysis
Table 9: Factor Analysis of Motivation Factors
Factor 1
Negative
motivation
I started business because I had no
other option
0.878
I started business because of lack of
sources of income
0.875
I started business because of poor
education for a job
0.873
I started business because of poor
English skill for a job
0.872
I started business because of a need
to support people from my cultural
background
0.832
I started business because of a need
to support my large family
0.82
I started business because of
unemployment
0.817
I started business because a need to
combine work and family
0.734
I started business because of
discrimination at work
0.717
I started business to sell products
needed by people from my cultural
background
0.704
Factor 2
Positive
Motivation
The joy I get from serving others
The experience I possess
0.820
0.733
The window of opportunity I saw
0.703
The supportive family that I have
0.591
Possession of a business idea
I want to be my own boss
Eigenvalues
Percentage variance
Cumulative variance
Cronbach's æ
Factor 3
To be
My Own
Boss
0.873
6.843
42.766
42.766
0.965
2.954
18.464
61.23
0.801
0.768
2.045
12.781
74.011
0.865
Notes: The EFA used principle components analysis with VARIMAX rotation. The initial factor solution on 18 items resulted in three factors
with eigenvalue greater than the unity. To purify the list, one item with a loading of less than 0.50 on all factors or cross-loaded on more than
one factor were removed (Hair et al. 2006). The table shows a purified list of 17 items with a clear factor structure showing three factors
labelled as Negative Motivation, Positive Motivation and To be My Own Boss.
Factor loadings < 0.5 have been suppressed.
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Table 10: Factor Analysis of Migrant Entrepreneurship Capabilities
Factor 1
Factor 2
Innovation
Opportunity
Identification
Employees are encouraged to see new ideas
as opportunities
0.844
Employees are rewarded for their new ideas
0.825
Our business is Prepared to do things that are
totally new in our industry
0.757
We constantly modify our product/service to
better serve our customers
0.744
We do not mind spending money in finding
new products or enhancing them
0.740
Our new product/service introductions have
caused significant changes in the industry
0.720
We prefer to be the first in the market with new
products or services
0.638
Management constantly seeks to develop new
ideas
0.619
I will take an opportunity even if it appears
risky
0.828
I act quickly if I see an opportunity
0.827
I always view problems as potential
opportunities
0.800
I am always on the lookout for opportunities to
make money
0.732
Factor 3
Proactiveness
Normally we want to do the best compared to
other businesses in the same industry
0.867
Our business is very often the first to introduce
new products/services, administrative
systems, and methods of production
0.783
Normally competitors react towards the
changes that we initiate in our business
Eignenvalues
Percentage variance
Cumulative variance
Cronbach's æ
4.820
32.132
32.132
0.931
3.371
22.473
54.605
0.907
0.777
3.017
20.115
74.719
0.894
Notes: The EFA used principal components analysis with VARIMAX rotation. The table shows a purified list of 15 items resulted in three
factors with eigenvalue greater than unity after the first run of EFA. The results shows three factors labelled as Innovation, Opportunity
Identification and Pro-activeness.
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5-7-1 Correlation matrix
Table 11 : Correlation Matrix
Negative
Motivation
Positive
Motivation
To be
My Own
Boss
Negative Motivation
Positive Motivation
.448**
To be My Own Boss
.447**
.631**
Innovation
.529**
.541**
.517**
Opportunity Identification .601**
.627**
.662**
Pro-activeness
.510**
.553**
.539**
Mean
4.091
5.898
6.205
Std. Deviation
1.384
1.116
1.370
Note: ** Correlation is significant at the 0.01 level (2-tailed).
Innovation
.562**
.550**
5.496
1.459
Opportunity
Identification
.620**
5.632
1.261
Proactiveness
5.582
1.273
5-7-2 Multiple regression analysis
The multiple regression results (Table 12) show that negative motivation has significant
positive relationship with all three entrepreneurship capability variables, thus supporting
hypotheses H1a, H1b and H1c. The results also show that positive motivation has significant
positive effect on all three capability variables, suggesting that hypothesis H2a, H2b and H2c
are also supported. Further, the results show that to be my own boss has significant positive
effect on the three entrepreneurship capability variables, indicating the hypothesis H3 a, H3b
and H3c are supported.
Table 12: Results of multiple regression analysis
Model 1
Model 2
Model 3
Innovation
Opportunity seeking
Pro-activeness
Negative motivation
0.322***
0.332***
0.225***
Positive motivation
0.228***
0.249***
0.419***
To be my own boss
0.201**
0.341***
0.222***
R2
0.382
0.567
0.512
Adjusted R2
0.369
0.558
0.502
F
29.313***
63.175***
51.414***
N
152
152
152
Independent variables
Notes: Figures shown are standardised coefficients (i.e. beta values).
*p < 0.10; **p < 0.05; *** p < 0.01.
5-7-3 Relationship between motivation factors and entrepreneurship capabilities
Findings of this study support all three sets of hypotheses H1, H2 and HC. First, these findings
of H1a, H1b and H1c reveal that “push” motivation factors for Australian migrants to start
businesses are significantly and positively related to migrant entrepreneurs’ innovation,
opportunity identification and pro-activeness. These findings confirm the empirical studies’
results (Lee and Petersen 2000; Sriram, Mersha and Herron 2006, Sahin et al. 2009). As
revealed by Nathan and Lee (2013), migrant entrepreneurs are more effective in generating
new ideas in terms of innovation on process instead of products and are more inclined to adopt
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disruptive innovation, due to the limited resources and willingness of taking risks. Sriram,
Mersha and Herron (2006) also suggest the motivation to venture creation is influenced by the
traits of innovation and risk propensity which further implies that migrant entrepreneurs are
pushed to develop innovation to increase the chance of venture success.
Further, the findings imply that “push” motivation factors for Australian migrants to start
business positively effect on the migrant entrepreneurs’ identifying and seizing opportunities.
The findings are consistent with Kloosterman (2010), Aramand and Valliere (2012) findings.
Kloosterman (2010) found that migrants are able to seek market opportunities from ethnic
consumers which is a “push” motivation factor for migrants to start their businesses. Aramand
and Valiierre (2012) also supported the findings. The findings also imply that “push” motivation
factors have positive effect on migrant entrepreneurs’ capability of being proactive towards
competitors. Lower level of education or lack of skills or other conditions such as racial
discrimination is considered the driver for migrant entrepreneurs’ to be proactive to predict the
future demand ahead of competitors to pursue the venture success, as suggested by (Lumpkin
and Dess 2001).
Second, the findings related to H2a, H2b and H2c reveal that “pull” motivation factors for
Australian migrants to start business has significant positive relationship with entrepreneurs’
capabilities. As discussed previously, the pull factors include some factors such as to be
independent, motivation of earning extra incomes, work experience and business idea
possession are key to increase the capabilities of entrepreneurs and enable them to achieve
the venture success. The previous research findings suggest that migrant entrepreneurs tend
to pursue innovative ideas and are interested in changing business process, products and
services to increase the profitability of small or new firms (Nathan and Lee 2013). Moreover,
they are more inclined to seek business opportunities (Kloosterman 2001) and are proactive
when facing competition (Jones and Dimtratos 2004).
Third, regarding H3a, H3b and H3c findings suggest that “to be own boss” as a “pull” motivation
factor inspire migrant entrepreneurs to start their businesses, which has a positive effect on the
three capabilities. “To be my own boss” is a unique “pull” factor and also a symbolic approach
for new migrants to express themselves in terms of success, wealth and social status.
6. Conclusion and Implications
This study has used the survey data and factor analysis approach to answer the research
question: What motivates migrants in Australia to business start-up? We investigated three
motivation factors (Factor 1 - negative motivation; Factor 2 - positive motivation; and Factor 3 “To be my own boss”). The top 3 items of Factor 1 indicate the significance of migrant
entrepreneurs’ business start-up. These were because they had no other option, followed by
lack of sources of income and poor education for a job. On the contrary, for Factor 1, the need
to sell products needed by people from the same cultural background showed the lowest of all
the items, followed by discrimination at work and the need to combine family and work. This
issue is confirmed by the literature that sufficient number of potential customers of ethnic
products/services are the emergence of ethnic enterprises (Green and Owen 2004). A need to
combine work and family suggest that migrant entrepreneurs regard family as top priority,
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hence strive for flexible work structures. On the extreme end, the lowest on the list was
discrimination at work and poor English skills. This empirical finding differs from other studies.
The literature had identified racial discrimination at work as one of the major factors that have
instigated migrants to venture creation (Masurel et al. 2002). The explanatory factor for this
finding could be that most respondents in Melbourne, never worked in other organisations
upon their arrival in the country, hence rated discrimination as a push factor, low. Regarding
poor English skills, this could be attributable to the fact that most respondents were proficient
in English as it is the medium of instruction in School as well as one of the official languages in
their home countries. Again, migrants in Australia are given the opportunity to learn English
upon arrival. However, this issue needs substantiation with qualitative research, such as either
face to face interviews or focus group discussion with migrant entrepreneurs.
Regarding factor 2 (positive motivation), two of the four items stand out as significant “push”
situations for migrant entrepreneurs to start businesses. These include: “the joy I get from
serving others”, and “the experience I possess”. The least significant was “the supportive
family that I have” and “the window of opportunity that I have”. Suffice it to say that all these
factors are supported by the literature (Sahin et al. 2009; Davila, Bohara, and Saenz 1993;
Mora and Davila 2005; Guerra and Patuelli 2014).
The survey and descriptive data were also used to analyse the answer to the research
question: Do culture influences migrant entrepreneurs in staff recruitment, customers,
suppliers and product/service preferences? Ease of communication was important for migrant
entrepreneurs in employing staff, catering for unmet needs of customers from the culture was
also vital when targeting customers. Regarding the choice of suppliers, assurance of a steady
supply was more important for migrant entrepreneurs than their ethnicity (Tolciu 2011).
The survey data and factor analysis was also used to answer the research question: Do
migrant entrepreneurs possess opportunity identification, innovation, and pro-activeness
capabilities? Factor 1(innovation) was analysed based on 8 items. The top three items were:
Employees are encouraged to see new ideas as opportunities; employees are rewarded for
their new ideas; and our business is prepared to do things that are totally new in our industry.
This suggest that the significance of these innovation capabilities for migrant entrepreneurs
(Nathan and Lee 2013; Adrich and Waldinger 1990). Factor 2 related to opportunity
identification and was analysed on four items. The two significant capabilities were: “I will take
an opportunity even if it appears risky” and “I act quickly if I see an opportunity”. As for factor 3
(pro-activeness), migrant entrepreneurs strive to do the best compared to other businesses in
the same industry (Lumpkin and Dess (2001). Thus competitive advantage is important for
migrant entrepreneurs.
Multiple regression analysis confirmed all the motivation factors to have significant positive
relationship with all the three capability variables.
Our results are consistent with our empirical framework, representing contribution of this
investigation. Policy implications are offered for government policies to provide financial grants
to migrant entrepreneurs (for example, seed grant, bank loans and tax incentives). Training
programs on entrepreneurship are also important for migrant entrepreneurs to effectively
manage their enterprises. Further research using qualitative research such as, either face to
face interviews or focus group discussion to investigate reasons for low rated push motivation
factors of “discrimination at work and poor English skills” is suggested. The limitation of this
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Proceedings of Annual South Africa Business Research Conference
11 - 12 January 2016, Taj Hotel, Cape Town, South Africa, ISBN: 978-1-922069-95-5
study was that the questionnaire omitted migrant entrepreneurs’ level of education and gender,
which could aid in ascertaining if these two variables influence entrepreneurial capabilities.
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