Beyond Ethnic Entrepreneurship: Ethnicity and the Economy in Enterprise

Since the 1970’s, the increase in business ownership has been especially noteworthy among ethnic groups in the United States (Light 1972; Light and Bonacich 1988; Waldinger et al. 1990). Some ethnic minority groups, such as Koreans and Cubans, are even characterized as “entrepreneurial” because their rates of business-ownership participation far exceed that of other groups. Ethnic affiliation, however, does not explain the marginal rates of business ownership among some ethnic groups, such as Mexicans; or entrepreneurship among “non-ethnic” groups – groups not readily identified with their ancestral heritage – such as US-born “whites”. Actually, by definition, ethnic entrepreneurship is limited to ethnic groups and often to those groups with above-average participation rates. And while ethnic entrepreneurship may be associated with economic mobility, group participation rates do not capture this relationship. To address these concerns the present study explores entrepreneurship from a new angle. I introduce an economic sociology approach to entrepreneurship to theoretically and empirically develop the ethnic entrepreneurship perspective. Theoretically, I apply Polanyi’s (1944; 1992[1957]) conceptualization of the modern market economy to entrepreneurial activity. Following Polanyi (1944; 1957), I argue that the economic system of a given society is distinguished by three forms of economic integration -- market exchange, reciprocity, and redistribution (Polanyi 1944; 1992[1957]). Under capitalism, the market exchange relationship is the primary form of economic integration in a market economy (1992[1957]:35). Alongside the market exchange relationship are two secondary forms of economic integration, reciprocity and redistribution. These three interdependent forms of economic integration constitute relationships found in the market economy that contribute to its maintenance.