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Ethnicity and acquisition of external capital at start-up stage: differences between small native Swedish- and immigrant-owned firms

Author

Listed:
  • Darush Yazdanfar
  • Saeid Abbasian

Abstract

The aim of the study was to explain empirically the differences in external financing between native- and immigrant-owned small businesses in terms of ethnicity and other relevant variables. A sample of 2,814 native- and immigrant-owned small businesses, based on a unique and comprehensive database gathered through interviews, was analysed employing several univariate and multivariate methods. The results suggest that ethnicity is an important explanatory variable differentiating between acquisitions of external capital at start-up stage. Owner characteristics such as age, experience of starting businesses and education also have an impact on finance-seeking behaviour and thereby on the acquisition of external capital. The findings indicate that characteristics of the firm, such as personal start-up capital, firm size, legal form and industrial sector, do partly influence access to external capital. Since knowledge about this issue is limited, the results of this study add to our understanding of variables affecting the behaviour of small business endeavours in seeking funding at start-up.

Suggested Citation

  • Darush Yazdanfar & Saeid Abbasian, 2012. "Ethnicity and acquisition of external capital at start-up stage: differences between small native Swedish- and immigrant-owned firms," International Journal of Business and Globalisation, Inderscience Enterprises Ltd, vol. 9(4), pages 442-460.
    • Handle: RePEc:ids:ijbglo:v:9:y:2012:i:4:p:442-460
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