HOW DIFFERENT ARE ETHNIC ENTREPRENEURS? A STUDY OF INVOLVEMENT IN ETHNIC COMMUNITY, AND PERSONAL AND BUSINESS CHARACTERISTICS
Radha
Chaganti, Rider University
Patricia G. Greene ,University
of Missouri Kansas City
Principal Topic
This paper proposes that the term “ethnic entrepreneur” should be defined in terms of the persona involvement of the entrepreneur in the ethnic community instead of reported ethnic grouping. It hypothesizes that significant differences will surface between the highly involved and least involved ethnic entrepreneurs on personal and business characteristics. Four measures gauge the degree of involvement. First: are friendships primarily from within the ethnic community? Second: are neighbors primarily from within the community, third, how many times did the entrepreneur attend meetings of ethnic community organizations in the last year, and fourth, how important is the goal of contribution to ethnic community for this individual.
In comparing the personal and firm characteristics of the highly involved and least involved ethnic entrepreneurs, in addition to the variables used in previous research, we examine business linkages of the firms with ethnic communities, entrepreneurs’ business goals, cultural values business strategies, and also include multiple criteria of performance.
Method and Results
T-tests were done on 112 Asian and Latino entrepreneurs split in to top and bottom quartiles on the personal involvement scale. Results showed several significant differences between the two groups on variables relating to entrepreneurs’ background characteristics, their business related goals, cultural values, business strategies, and business performance. For example personal backgrounds of high involvement owners were significantly weaker in that they had fewer years of industry experience and years of education in U.S. Similarly, their businesses were significantly younger, and were more likely to be service type of businesses. Also, they had more ethnically centered business linkages. On goals, the non-financial goal of contribution to ethnic community was a significantly more important for them. Thus, these businesses needed both economic and social support of the community (Bonacich & Modell, 1980; Greene & Butler, 1996). Overall, this study strongly supports our thesis that owner-manager’s ethnic origin is not as accurate a criterion of ethnicity as is the level of community involvement. The latter appears to better for predicting whether an “ethnic” business would operate outside of the mainstream economy, or operate in ways similar to those of a mainstream business owned by a person of Caucasian descent.
CONTACT: Radha Chaganti, Rider University, Lawrenceville, NJ, 08648; (T) 609-895-5529; (F) 609-896-5304; chaganti@rider.edu
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