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Financial Funding Of Immigrant Businesses

Author

Listed:
  • NONNA KUSHNIROVICH

    (Department of Economics and Management, Institute for Immigration and Integration, Ruppin Academic Center, Emek Hefer 40250, Israel)

  • SIBYLLE HEILBRUNN

    (Department of Business Administration, Institute for Immigration and Integration, Ruppin Academic Center, Emek Hefer 40250, Israel)

Abstract

This study investigates differences in financial funding between immigrant and non-immigrant businesses and delineates factors influencing financial funding of immigrant businesses. Data for the study were collected in Israel between 2000 and 2005. By combining convenient and snowball samples, 214 native Israelis and 153 FSU immigrant entrepreneurs answered a questionnaire. We classified financial sources for immigrant businesses according to their affiliation to the ethnic community, and according to their relation to official financial institutions. Our study revealed that the scope of funding of immigrant businesses is significantly smaller than that of non-immigrant businesses. Immigrant entrepreneurs are more likely to finance their businesses from informal sources but they use fewer loans from family and friends than non-immigrant entrepreneurs. We found that immigrant entrepreneurs who deal with co-ethnic clients do not use more ethnic sources of capital for financing their businesses: the share of co-ethnic clients does not influence the ratio of ethnic financial sources for both setting up and expanding immigrant businesses. Our study revealed that governmental support in the terms of designated loans is the most salient factor influencing financial funding of immigrant businesses. The results suggest important implications for public policy.

Suggested Citation

  • Nonna Kushnirovich & Sibylle Heilbrunn, 2008. "Financial Funding Of Immigrant Businesses," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 13(02), pages 167-184.
    • Handle: RePEc:wsi:jdexxx:v:13:y:2008:i:02:n:s1084946708000910
    DOI: 10.1142/S1084946708000910
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    References listed on IDEAS

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    1. Maude Toussaint-Comeau, 2005. "Self-employed immigrants: an analysis of recent data," Chicago Fed Letter, Federal Reserve Bank of Chicago, issue Apr.
    2. Constant, Amelie F., 2004. "Immigrant versus Native Businesswomen: Proclivity and Performance," IZA Discussion Papers 1234, Institute of Labor Economics (IZA).
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    Citations

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    Cited by:

    1. Busch, Christian & Mudida, Robert, 2023. "Asserting and transcending ethnic homophily: how entrepreneurs develop social ties to access resources and opportunities in socially contested environments," LSE Research Online Documents on Economics 121150, London School of Economics and Political Science, LSE Library.
    2. Bryan Malki & Timur Uman & Daniel Pittino, 2022. "The entrepreneurial financing of the immigrant entrepreneurs: a literature review," Small Business Economics, Springer, vol. 58(3), pages 1337-1365, March.
    3. Tengeh, RK & Ballard, HB & Slabbert, AS, 2012. "Do immigrant-owned businesses grow financially? An empirical study of African immigrant-owned businesses in the South Africa," MPRA Paper 40610, University Library of Munich, Germany.
    4. Xiaohua Yang & Elly Ho & Artemis Chang, 2012. "Integrating the resource-based view and transaction cost economics in immigrant business performance," Asia Pacific Journal of Management, Springer, vol. 29(3), pages 753-772, September.
    5. Dieu Hack-Polay & Justice Tenna Ogbaburu & Mahfuzur Rahman & Ali B Mahmoud, 2020. "Immigrant entrepreneurs in rural England – An examination of the socio- cultural barriers facing migrant small businesses in Lincolnshire," Local Economy, London South Bank University, vol. 35(7), pages 676-694, November.
    6. Neville, François & Orser, Barbara & Riding, Allan & Jung, Owen, 2014. "Do young firms owned by recent immigrants outperform other young firms?," Journal of Business Venturing, Elsevier, vol. 29(1), pages 55-71.
    7. Steven A. Brieger & Michael M. Gielnik, 2021. "Understanding the gender gap in immigrant entrepreneurship: a multi-country study of immigrants’ embeddedness in economic, social, and institutional contexts," Small Business Economics, Springer, vol. 56(3), pages 1007-1031, February.
    8. Yuri Ostrovsky & Garnett Picot & Danny Leung, 2019. "The financing of immigrant-owned firms in Canada," Small Business Economics, Springer, vol. 52(1), pages 303-317, January.
    9. Carson Duan & Bernice Kotey & Kamaljeet Sandhu, 2022. "Towards an Analytical Framework of Dual Entrepreneurial Ecosystems and Research Agenda for Transnational Immigrant Entrepreneurship," Journal of International Migration and Integration, Springer, vol. 23(2), pages 473-497, June.

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