Does it really matter? Understanding the impact of engagement and beliefs on immigrant ethnic minority entrepreneurship. H.P. de Vries Department of Management, Marketing and Entrepreneurship University of Canterbury Christchurch, New Zealand Corresponding author: herb.devries@canterbury.ac.nz ABSTRACT This research considers the importance of ethnic minority immigrant entrepreneurs’ engagement within and beliefs surrounding their host country experiences, and how this impacts on entrepreneurial action. The relevance of such research is highlighted by an ever increasingly global economy and as a consequence greater emphasis has been placed on understanding the entrepreneurial behaviour of persons moving across cultural, economic and national borders. This paper is derived from a grounded theory study of narratives from ethnic minority immigrant entrepreneurs in New Zealand, and resulted in a conceptual framework which considers the impact of engagement and beliefs on actions within the entrepreneurial process. The conclusion of this study is that there is an interdependent relationship which warrants further investigation and this paper offers insights into that relationship and a framework for further empirical study. Key Words: ethnic minority, immigrant entrepreneurs, beliefs, engagement. INTRODUCTION In an effort to understand entrepreneurial behaviours within ethnic minority immigrant communities the current literature has predominantly focused on their action orientation, as in their social and economic engagement with the host country environment. Studies have examined diverse issues such as immigrant entrepreneurs’ business entry practices (Zhou, 2004), mixed embeddedness (Kloosterman, Van de Leun, & Rath, 1999) blocked mobility (Piperopoulos, 2010), and agency (Ram, Jones, Edwards, & Nitu, 2013). This engagement with the host environment has often been considered from a process perspective such as the entrepreneurial timeframe espoused by Waldinger, Howard, Ward, & associates (1990). However, scarce consideration has been given to the specific way an immigrant ethnic minority entrepreneur’s beliefs surroundings their host country experiences impact on their entrepreneurial decisions and actions. The relevance of expanding our understanding of entrepreneurial research is highlighted by an ever increasingly global economy, where there are greater movements of products, services and labour worldwide. As a consequence greater emphasis has been placed on understanding the entrepreneurial behaviour of persons moving across cultural, economic and national borders (Levent, Masurel, & Nijkamp, 2003). Furthermore a major conclusion of the literature on ethnic minorities is that entrepreneurship is a significant form of economic activity (Clark & Drinkwater, 2010), and a promising springboard for immigrants’ social integration (Hiebert, 2003). This paper builds on research into the entrepreneurial activities 1 within immigrant ethnic minority groups, and is derived from a grounded theory study (de Vries & Hamilton, 2013) undertaken in New Zealand: a prominent migrant receiving country with well-established ethnic minority communities. The study’s principal findings drew conclusions on the nature of immigrant ethnic minority entrepreneurs’ embeddedness in four constructs – migration, settlement, identity and business - that impacted on the propensity for enterprise formation within different ethnic communities. Further discovery, based on grounded theory principles, resulted in a conceptual model that represents immigrant ethnic minority entrepreneurs’ engagement (participation and involvement in society) and beliefs (assumptions of their world); and considered the influence of these variables on the four constructs and the ensuing entrepreneurial actions. This paper draws conclusions on the later findings by outlining an emergent theory which argues that during the entrepreneurial process the immigrant ethnic minority entrepreneurs are influenced by both their beliefs regarding: their environment, relationships and self, and their social and economic engagement. The paper concludes with a conceptual framework and offers some insight into how and when beliefs and engagement may influence entrepreneurial actions, and recommends that further study be undertaken to test and refine the findings. LITERATURE Ethnic entrepreneurship can be defined as “business activities in a certain area driven or undertaken by people of a different ethnic or cultural origin than the indigenous population” (Masurel, Nijkamp, & Vindigni, 2004, p. 78). Research in this field has a comparatively short history (Barrett, Jones, McEvoy, & McGoldrick, 2002), yet its rise in prominence is reflected in the increasing number of foreign ethnic minority migrants in urban and rural environments who choose enterprise formation as a means of self-actualisation (Masurel et al., 2004). Immigration has generally been considered as economically and socially expansionary (Chapple, Gorbey, & Yeabsley, 1994; Daniels, Radebaugh, & Sullivan, 2002; Elliott & Gray, 2000; Poot, 1993; Watts, White, & Trlin, 2004; Yeabsley, 1997) and has played a significant role in the development of entrepreneurial activity within migrant receiving countries (Rath & Kloosterman, 2003). A further conclusion of the literature is that entrepreneurship is a promising springboard for immigrant ethnic minorities’ social integration (Hiebert, 2003). Yet other studies have argued that it is an economic backwater, with ethnic minority entrepreneurs operating into poorly rewarded sectors (Clark & Drinkwater, 2010). Subsequently, researchers have placed emphasis on understanding the entrepreneurial processes involved with persons moving across national borders into different cultural and economic settings (Levent et al., 2003), and therefore stressing the importance of understanding their transitional behaviours (Davidson, Low, & Wright, 2001) and its environmental context (Clydsdale, 2008) in explaining the entrepreneurial actions of creating and sustaining business ventures (Morris, 2002). Masurel et al. (2004) alluded to a combination of cultural and structural approaches that play a decisive role in the entrepreneurial process (p.79). They drew attention to the importance of ethnic minority entrepreneurs’ engagement with both the host country and their ethnic community’s cultural norms. Waldinger et al. (1990) had previously argued the importance of migration history. They stated that each cultural group has a unique mix of premigration, migration, and post migration characteristics, and that this mix sets the parameters for economic participation. A further contribution offered by Kloosterman et al. (1999) 2 suggested that immigrant entrepreneurs could only be understood effectively by taking into account a concept of “mixed embeddedness”, which encompasses both their embeddedness in social networks (their own formal and informal engagement), and their embeddedness in the socio-economic and politico-institutional environment of the country of settlement. These researchers recognised that immigrant ethnic minority entrepreneurial activity cannot occur in a vacuum. Instead it is a process deeply embedded in cultural and social activities (Krueger & Brazeal, 1994). In practice the literature points to major variables such as limited employment opportunities, blocked mobility, rates of unemployment, marriage, family, gender, enclaving, length of time in a country, and rates of higher education, as influencing the business formation outcomes (Basu, 2004; Clark & Drinkwater, 2010; Collins, 2003; de Vries & Kantor, 2012; Hammarstedt, 2004; Hiebert, 2003; Ram, 1997; Smallbone, Ram, Deakins, & Baldcock, 2003; Zhou, 2004). In any case, each immigrant ethnic minority group has its own unique mix of pre-migration, migration, and post migration characteristics, and this combination sets the parameters of their economic engagement (Waldinger et al., 1990). Overall the literature stresses the understanding of the immigrant ethnic minority entrepreneurs’ behavioural patterns whilst engaging with the opportunity structures of the host country. By engagement we refer to the act of participating or becoming involved in the host environment. Many of these behaviours are very context bound and offer greater understanding of ethnic specific or country specific engagement (e.g. Smallbone, Bertotti & Ekanem, 2005). However, this paper contends that how these entrepreneurs engage with their social and economic surroundings is only part of the equation, as current literature does not differentiate the engagement patterns from immigrant ethnic minority entrepreneurs’ beliefs regarding self and their surroundings. Beliefs have been defined as part of a person’s cognitive organisation and understanding of important concepts, entities and relationship in their life; in essence their assumptions of the world (Nicholson & Wong, 2001). Similarly Smith, Caputi, and Crittenden (2012) in their study of women’s glass ceiling beliefs used the term broadly in stating that attitude and opinion are interchangeable with belief. Lingis (2012) cited Geertz, 1973 as referring to beliefs as a way of looking at life and a means of construing a picture of the world. Lingis goes further to suggest that belief involves trusting in others and often accepting “what is not known as though it were known” (p. 14). Importantly behaviourist researchers have long considered beliefs to be a significant determinant in behaviour. Existing research points to interesting findings on how an individual’s processing of available information mediates the effects of environmental factors on their behaviour. (Ajzen, 1991, p. 179). Decisions and actions can be influenced by ‘beliefs’ about self (e.g. Bandura, 1982, 1991), cultural disposition (e.g. Pantouvakis, 2013; Pio & Dana, 2014), and trying to make sense of their environment (e.g. Mills & Pawson, 2006; Nicholson & Wong, 2001). To this end Bandura, Adams, Hardy, and Howell’s (1980) study of maths students suggested that people’s behaviour is strongly influenced by their belief that they can perform to expectation. Ajzen (1991) suggested that it is our salient beliefs that are determinants of our intentions and actions. Although Ajzen argued that there are significant relationships between behavioural beliefs and attitudes toward the behaviour, the exact form of these relations is still uncertain (p. 206). In returning to salient beliefs, Bandura (1982) referred to self-efficacy beliefs as greatly influencing choice, perseverance and effort. In contrast Bandura said that people with beliefs that reinforce inefficaciousness in coping with the environment dwell on their personal efficiencies and imagine greater difficulties, even if they do not exist. Beliefs bring in a level of subjectivity and Kor, Mahoney, and Michael (2007) reaffirmed the subjective nature of 3 entrepreneurial discovery and creativity. They argued that the significant difference in firm performance is influenced by the heterogeneity in belief systems. For example, the Pio and Dana (2014) study of Indian immigrants in New Zealand refers to hesitancy in their belief that exporting would benefit them. They conclude that this has impacted negatively on Indian entrepreneurial activity. So uncovering to what extent ‘beliefs’ - as in assumptions, attitudes and views regarding self and their ethnic and host norms - are prevalent and how those beliefs are structured will help us understand the conditions which will nurture immigrant ethnic minority entrepreneurial activity. Finally, recent entrepreneurial research has been undertaken to better understand entrepreneurial perception, and such research supports the view that beliefs influence entrepreneurial action (Tang & Rothenberg, 2009). Each individual’s belief system contributes to different perceptions regarding the opportunities structures within a host country (Kor et al., 2007), and therefore play a role in enterprise formation (Edelman & YliRenko, 2010). Yet few attempts have been made to integrate insights from the theories on social and economic conditions, entrepreneurial engagement and the entrepreneur’s belief systems. The conceptual framework presented in this paper attempts to debate that gap. METHODOLOGY The conceptual framework for this study was derived from a grounded theory methodology. This considered the proposition of defining the ethnic minority immigrant entrepreneurship process within the complex socio-cultural and environmental context in which it exists. A grounded theory approach was adopted because of its inductive process of ‘discovering’ theory from data (Glaser & Strauss, 1967). For sampling purposes this study referred to the broad range of small business activities undertaken by immigrants of differing ethnic backgrounds in New Zealand; a country with a dominant European culture with 74% of people stating they are of European decent. However, one in four residents was born outside of the country (Statistics New Zealand, 2013). New Zealand’s immigration trends are comparable to those of other major receiving countries, and its immigration policies have also evolved to reflect global trends in labour mobility, the emergence of Asian economies, and global social and political changes. The country has a large small business sector (Cameron & Massey, 1999) in which businesses with 19 or fewer employees contribute to 30% of the country’s total workforce and GDP (Ministry of Business Innovation and Employment, 2014). New Zealand also has unique characteristics such as a small population of 4.55 million (Statistics New Zealand, 2014) disperses across a country of 268,021 square kilometres (larger than the United Kingdom), and hence small and dispersed ethnic minority communities. It is a scenic but isolated country in the South Pacific, sharing no boarders and is two thousand kilometres from its nearest markets. Therefore labour and product mobility are not as fluid as the migrant receiving countries of the Americas, Southern Africa or Europe and may be considered a microcosm of immigrant ethnic minority entrepreneurial behaviour. Data which forms the basis of this paper was generated via seventy seven semistructured in-depth and follow-up interviews with forty two respondents, who were immigrant ethnic minority entrepreneurs in New Zealand. A conceptual framework emerged through the continuous interaction between data collection, coding, analysis and indexing as prescribed in grounded theory principles (Glaser, 1992, 1998; Glaser & Strauss, 1967; Goulding, 2002). The research captured the respondents’ thoughts and experiences through their own voice and 4 the principle finding was an ethnic resource profile with four embeddedness constructs Migration, Settlement, Identity and Business (de Vries & Hamilton, 2013) - that interlinked in defining an ethnic community’s ability to access a host country’s opportunity structures (Kloosterman, 2010). In line with grounded principles a further emergent theme resulted which identified a relationship between engagement and beliefs, which became the basis for this paper. Selective coding was then applied (Urquhart, 2013) across the constructs to the emergent themes of engagement and beliefs and a matrix classification was applied to the 6018 separate blocks of coded interview data obtained from the seventy seven transcripts. Each block of code was analysed in terms of the two axes which had emerged from grounded theory induction process (Glaser & Strauss, 1967; Goulding, 2002). The first axis had two elements, firstly whether statements referred to specifically held beliefs of the immigrant ethnic minority entrepreneur with respect to their environment, self and interpersonal relationships. For example, in referring to the identity construct factor of ‘working long hours’ a respondent said of self: “we were brought up with a Christian work ethic and that was that - you are responsible to work hard.” Secondly, the axis refers to the actual engagement by the immigrant entrepreneur with their social and economic environment. Again if we use the example of ‘working long hours’ a respondent said: I would get up at six in the morning and I would catch a bus to the city to my University. My lectures start at eight in the morning for two hours. I finish at ten, then I catch a bus back to Takapuna, I open my shop at ten thirty and close my shop at five thirty and then I shoot back to town for a six to nine pm class. And, you know, I have my dinner maybe at nine thirty - ten o’clock at the local food court just before they close, catch a bus about ten fifteen, get home just before eleven because there is a bit of distance to walk. So I did that for four and a half years. The hours were quite long, then when I finish University I was still putting in similar sort of hours but purely concentrating in business.” The second axis included the classifications of the data, in terms of their fit within the framework of Migration, Settlement, Identity and Business (de Vries & Hamilton, 2013) which is discussed in the next section. CONCEPTUALISATION In this study of the immigrant ethnic minority entrepreneurial experiences questions arose within the inductive methodology. First, can the engagement activities and belief patterns be mapped against the unique stages of the entrepreneurial process (e.g. Waldinger et al., 1990)? That is, the entrepreneurs’ engagement with or beliefs about their social networks (both formal and informal), and the socio-economic and politico-institutional environment of the host country (Kloosterman et al., 1999). Second, if so, can this be used as a means of understanding catalysts and influences in the entrepreneurial process? The author considered the nature of engagement and beliefs during the development of an immigrant ethnic minority entrepreneurship profile that stressed four main constructs as encompassing the immigrant entrepreneur experience (de Vries & Hamilton, 2013); and this facilitated consideration of engagement and beliefs at various stages of the entrepreneurship process. In brief these constructs consist of: 5 1. The Migration construct: how and why homeland influences, such as geographic origin, cultural and religious values, language, and personal connection, influence whether a group embeds in pre- or post-migration traditions. 2. The Settlement construct: captures the influence of societal and employment fit on integration, and determines whether an ethnic minority group embeds in its ethnic or its host community. 3. The Identity construct: shows different skills and business capabilities and affects whether groups embed either in a singular identity or in a dual ethnic/host identity. 4. The Business construct: how the individual agency factors of confidence, and other human and financial capitals, produce a business-ready orientation that can embed in the opportunity structure and spawn entrepreneurship. This study asserts that each construct contributes to the entrepreneurial process in a sequentially linked manner to the overarching outcome as to what extent immigrant ethnic minority entrepreneurs access the business creation opportunity structures in the host country (Figure 1). This paper proposes that within each construct the propensity for engagement and beliefs can vary, and that an understanding of such variances offers some new insights into the nature of immigrant ethnic minority entrepreneurship. In exploring these relationships the entrepreneurs’ personal statements relating to either engagement or beliefs were mapped against the constructs. The individual blocks of coded data were interpreted in line with its categorisations and lead to conclusions with respect to the impact of beliefs versus engagement at the different stages of the entrepreneurship process. __________________________ Figure 1 about here __________________________ FINDINGS In this study the emerging conceptual framework relating to engagement and beliefs sought to establish some preliminary connections between two existing streams of entrepreneurial thought. The first well established in the literature; as in entrepreneurs’ interaction or engagement with their social and structural environment (e.g. Clark & Drinkwater, 2010; Collins, 2003; Ram, 1997; Smallbone, Bertotti, & Ekanem, 2005); and the second - less defined - subjective entrepreneurial beliefs about their environment (e.g. Edelman & YliRenko, 2010; Kor et al., 2007; Mills & Pawson, 2006; Tang & Rothenberg, 2009). These connections were the basis for introducing a conceptual framework which considers the influence of beliefs and engagement on migration, settlement, identity and business constructs. The preliminary finding are summarised as follows: Migration construct Discussion of engagement within their homeland environment was prominent. Factors of urban origins, geographic diversity, permanent migration, and limited resources were highlighted in this construct as influencing entrepreneurial action: “One thing I hated in 6 [homeland] was bureaucracy and the corruption I had to deal with.” To a lesser degree the family work ethic and maintaining the family value systems influenced immigrant entrepreneur’s actions: “up at 5.30 ..... would work until 10 at night just about every night.” Whereas there was only a weak relationship within the migration construct to statements relating to beliefs. The one strong identifiable belief was that the receiving country would offer a better quality of life for themselves and their children: “mainly for the education system for our daughter and the better lifestyle.” Settlement construct Strong engagement statements relating to urban assimilation or adaptation and attainment of employment were identified as influential in entrepreneurial action, for example: “it isn’t that long ago that I would speak somewhere and say ‘us Kiwis’ and people would laugh at me.” To a lesser degree the construct highlighted the impact of barriers to career opportunities, as in: “I was hoping to find a job as a travel agent quite easily, but I found out it is not true.” The strongest belief patterns emerged within this construct. It identified beliefs surrounding to coping with discrimination within the host country: “of course yes, some, but it happens everywhere. It happens in Hong Kong, it happens in Scotland. I don’t take it very serious;” and overall positive perception of the receiving country and its people: “absolutely, love it, couldn’t live anywhere else.” Identity construct Strong engagement patterns with respect to achievement orientation, a strong work ethic, strong family dynamics, and family business involvement emerged as contributing to entrepreneurial action. An example of family involvement is: “my wife and I are totally involved in the business. Everything we do is collectively done.” Belief factors influencing entrepreneurial action were a strong belief in the benefits of family-business dynamics, the belief that they had good people skills, and a positive view toward hard work and long hours. Comments included: “I have always been brought up – you sort of get stuck in and do it yourself,” and “my feeling is that everybody can achieve anything if you really try hard enough and persevere.” They did have some concerns over a perceived mixed sense of national identity: “I myself can never be one hundred percent Kiwi.” Business construct The most prominent features influencing entrepreneurial action within this construct were the engagement factors such as formal learning, application of practical experience, fiscal responsibility, and financial support from family, customer focus, and long days spent in the business. A formal learning example is: “Actually I was trained as a bio-chemist, so I ended up with a MChem in bio-chemistry and then I did a bachelor degree in commerce as well;” and a family financial support example is: “we borrowed the money from China, from my parents and my sisters.” Ease of business start-up was also identified as a positive factor, although the level of regulation and the unsupportive business infrastructure restricted their entrepreneurial actions. To a lesser degree, the construct underscored the importance of beliefs related to quality of life over material gain, being seen as behaving ethically and valuing experience over formal training, for example: “I think it is life experiences more than the academic experiences that moulds you.” 7 DISCUSSION The question was posed: does it really matter whether we understand the impact of both engagement and beliefs on immigrant ethnic minority entrepreneurship? The findings of this study conclude that understanding does matter, although the degree of importance and the influence of engagement and beliefs vary significantly at different stages of the entrepreneurial process. This paper has attempted to conceptualise the impact of engagement and beliefs on the immigrant ethnic minority entrepreneurial process (Figure 2) as expressed through the migration, settlement, identity and business constructs devised by (de Vries & Hamilton, 2013). In terms of practical application of this conceptual framework, the following conclusions were drawn. __________________________ Figure 2 about here __________________________ Firstly the prominence of the engagement factors across all four constructs was a dominant feature of this study and supporting existing literature which dominates current thinking (e.g. Kloosterman, 2010; Kloosterman & Rath, 2001; Wang & Altinay, 2012; Zhou, 2004). Within the migration construct the study revealed that the entrepreneurial action is influenced by the immigrant ethnic minority entrepreneurs’ pre-migration homeland engagement characteristics, as also highlighted by Waldinger et al. (1990). Therefore they were more likely to bring with them a propensity for entrepreneurial behaviour from previous homeland experiences. This was then re-enforced by engagement patterns within the business (start-up) construct in which constant learning in their new environment, ease of business setup, and the application of their practical experience were prominent engagement factors in their entrepreneurial action. Furthermore, within the identity construct it was clear that entrepreneurs were networking within their ethnic and host communities, engaging family in their activities, and displaying entrepreneurial characteristics; which also yielded stronger entrepreneurial actions. These findings serve to re-enforce existing literature of immigrants environmental engagement, such as embeddedness (Jack & Anderson, 2002), adding value to society (Dhaliwal & Adcroft, 2005), and facilitating network connections (de Vries & Hamilton, 2013; Ram, Abbas, Sanghera, & Hillin, 2000). It therefore reinforces the importance of host countries adopting policies that attract entrepreneurial peoples and facilitating a climate for entrepreneurial opportunities. Secondly the study identified that belief patterns were less defined within the constructs and only displayed prominence in the settlement construct. This construct indicated positive perceptions of the host country and its people, and an indifference to or acceptance of existing barriers (such as discrimination) as facilitating entrepreneurial action. These finding reinforce the existing literature pronouncement of the importance of self-efficacy beliefs (Bandura, 1982). The only other significant evidence within the constructs were beliefs in the importance of a unified family and a strong work ethic, which were highlighted as influencing factors of entrepreneurial action within the identity construct. This would suggest attracting people with a positive attitude towards self and adapting to their host country, and those that 8 display a strong family orientation are significant factors in encouraging entrepreneurial action. At this stage it is noteworthy to emphasize that the objective of this paper was not to delve deeply in the specific impact of various beliefs but more to highlight the pervasiveness and influence of beliefs and engagement as part of immigrant ethnic minority entrepreneurs’ behavioural patterns. For example in the previous paragraph we inferred that beliefs were an influencer on entrepreneurial actions within the settlement construct. The data confirmed that there was a belief that discrimination was prevalent in the host society. Yet this was countered by an associated belief that such discrimination could be overcome, which in turn had a positive impact on entrepreneurial behaviours, as in “I have not come across a single individual who has failed in business because of these so-called racist factors.” Furthermore, the study not only infers that beliefs and engagement contribute to behaviours but that they are also interdependent. To explain this, if we return to the example of discrimination the engagement factor was often experiencing discrimination, as in “came back one night and all the locks were changed and all our baggage and belongings were outside.” This re-enforced the belief of social injustice, as in “until there is some kind of evolution of recognising people as New Zealanders and not as [ethnic identity], we will always find ourselves left out;” but the self-efficacy belief (Bandura, 1982) fortified the entrepreneurial behaviours to engagement in business formation, and in some cases to prove ‘them’ wrong, as in “if someone says I couldn’t do it, then I showed them I could!” Such findings point to a need for future studies that could consider in greater depth the impact of immigrant ethnic minority entrepreneurs’ specific beliefs or belief systems, and the interdependence of beliefs and environment engagement. CONCLUSION In considering the relationship between entrepreneurship, engagement and beliefs, this paper has - through a qualitative study - offered a conceptual framework (Figure 2) which can be used to shed light on the influence and connectedness of engagement and beliefs in influencing entrepreneurial behaviour. The study concluded that any policy-making within migrant receiving countries, which are targeted at promoting immigrant ethnic minority entrepreneurial activity, needs a balance between what can be done to enhance the infrastructure of the host country and the establishment of an appropriate immigrant profile. Within the conceptual framework developed in this study, the findings point to engagement factors holding greater prominence than beliefs as facilitators of entrepreneurial action in most constructs, but the inter-relationships were significant enough to warrant further investigation. 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The International Migration Review 38(3), 1040-1074. 12 Figure 1: Immigrant ethnic minority entrepreneurial journeys Settlement Migration Business Host country opportunity structures Identity Journey towards business formation Figure 2: The Beliefs and Engagement Framework Influence of Beliefs Entrepreneurial Behaviour Settlement Migration Business Identity maximisation of opportunity structures within host country Influence of Engagement Immigrant ethnic minority entrepreneurship process 13