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Immigrant Entrepreneurship in Cities: Global Perspectives [1st ed.]
 9783030503628, 9783030503635

Table of contents :
Front Matter ....Pages i-x
Introduction: Immigrant Entrepreneurship Research from a Comparative Perspective (Cathy Yang Liu)....Pages 1-9
Front Matter ....Pages 11-11
Migrant Entrepreneurship and Urban Development in Global Cities (Lauren W. Forbes, Cathy Yang Liu)....Pages 13-45
Immigrant Entrepreneurship in Sydney: Australia’s Leading Global City (Jock Collins)....Pages 47-65
Immigrant Entrepreneurship in Hong Kong (Biyang Sun, Eric Fong)....Pages 67-96
Comparative Notes on the Context of Reception and Immigrant Entrepreneurship in New York City, Washington, DC, El Paso, Barcelona, and Paris (Ernesto Castañeda)....Pages 97-122
Front Matter ....Pages 123-123
De-Bunking Myths? International Migrants, Entrepreneurship and the Informal Sector in Gauteng, South Africa (Sally Ann Peberdy)....Pages 125-151
Migrant Entrepreneurs in Industry Cluster Formation and Innovation: The Case of Semarang, Central Java, Indonesia (Holi Bina Wijaya, Iwan Rudiarto, Herlina Kurniawati)....Pages 153-173
Business Connections of Migrant Entrepreneurs: Finding a Niche in the Diverse City of Amsterdam (Juan Francisco Alvarado Valenzuela)....Pages 175-193
The Impact of Immigrant Entrepreneurship on City Building: Learning from Toronto (Zhixi Cecilia Zhuang)....Pages 195-211
Front Matter ....Pages 213-213
“Flushing—The Bigger, Better and Downright Sexier Chinatown of New York”: Transnational Growth Coalitions and Immigrant Economies (Tarry Hum)....Pages 215-242
Grassroots Globalization in the Twenty-First Century’s First 15 Years: New Immigrant Communities in the Political Economy of Asia and Africa (James H. Spencer)....Pages 243-263
Revitalizing Urban America Through the EB-5 Immigrant Investor Program (Edward S. Smith)....Pages 265-277

Citation preview

The Urban Book Series

Cathy Yang Liu   Editor

Immigrant Entrepreneurship in Cities Global Perspectives

The Urban Book Series Editorial Board Fatemeh Farnaz Arefian, University of Newcastle, Singapore, Singapore; Silk Cities & Bartlett Development Planning Unit, UCL, London, UK Michael Batty, Centre for Advanced Spatial Analysis, UCL, London, UK Simin Davoudi, Planning & Landscape Department GURU, Newcastle University, Newcastle, UK Geoffrey DeVerteuil, School of Planning and Geography, Cardiff University, Cardiff, UK Andrew Kirby, New College, Arizona State University, Phoenix, AZ, USA Karl Kropf, Department of Planning, Headington Campus, Oxford Brookes University, Oxford, UK Karen Lucas, Institute for Transport Studies, University of Leeds, Leeds, UK Marco Maretto, DICATeA, Department of Civil and Environmental Engineering, University of Parma, Parma, Italy Fabian Neuhaus, Faculty of Environmental Design, University of Calgary, Calgary, AB, Canada Steffen Nijhuis, Architecture and the Built Environment, Delft University of Technology, Delft, The Netherlands Vitor Manuel Aráujo de Oliveira

, Porto University, Porto, Portugal

Christopher Silver, College of Design, University of Florida, Gainesville, FL, USA Giuseppe Strappa, Facoltà di Architettura, Sapienza University of Rome, Rome, Roma, Italy Igor Vojnovic, Department of Geography, Michigan State University, East Lansing, MI, USA Jeremy W. R. Whitehand, Earth & Environmental Sciences, University of Birmingham, Birmingham, UK Claudia Yamu, Department of Spatial Planning and Environment, University of Groningen, Groningen, Groningen, The Netherlands

The Urban Book Series is a resource for urban studies and geography research worldwide. It provides a unique and innovative resource for the latest developments in the field, nurturing a comprehensive and encompassing publication venue for urban studies, urban geography, planning and regional development. The series publishes peer-reviewed volumes related to urbanization, sustainability, urban environments, sustainable urbanism, governance, globalization, urban and sustainable development, spatial and area studies, urban management, transport systems, urban infrastructure, urban dynamics, green cities and urban landscapes. It also invites research which documents urbanization processes and urban dynamics on a national, regional and local level, welcoming case studies, as well as comparative and applied research. The series will appeal to urbanists, geographers, planners, engineers, architects, policy makers, and to all of those interested in a wide-ranging overview of contemporary urban studies and innovations in the field. It accepts monographs, edited volumes and textbooks. Now Indexed by Scopus!

More information about this series at http://www.springer.com/series/14773

Cathy Yang Liu Editor

Immigrant Entrepreneurship in Cities Global Perspectives

Photo credit: Liu 2017

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Editor Cathy Yang Liu Andrew Young School of Policy Studies Georgia State University Atlanta, GA, USA

ISSN 2365-757X ISSN 2365-7588 (electronic) The Urban Book Series ISBN 978-3-030-50362-8 ISBN 978-3-030-50363-5 (eBook) https://doi.org/10.1007/978-3-030-50363-5 © Springer Nature Switzerland AG 2021 This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Acknowledgements

I would like to take this opportunity to acknowledge the contributors for their belief in this book project, the importance of the topic, and their efforts in their respective chapters that bring the world into one book. I attribute the idea of this book—the study of urban in the global from a comparative perspective—to the various programs and opportunities offered at my Ph.D. institution (University of Southern California, USC) and current institution (Georgia State University, GSU). Through USC’s Urban and Global Fellowship Program and GSU’s Global Partnership for Better Cities Initiative, I was able to benefit from the lively discussions and collaborative research with scholars and students on these topics as well as embark on adventures to experience various global cities. Conferences organized by GSU and its partner institutions that took place in Atlanta 2016 and 2019, and in Hong Kong 2017, provide platforms for in-depth dialogue that further reinforced my interest in this area. I thank Juliana Pitanguy and Sanjiev Mathiyazhagan at Springer for guiding me through the publishing process. Special thanks go to Lauren Forbes, doctoral student of Public Policy at GSU’s Andrew Young School of Policy Studies, for her excellent assistance in putting this book together.

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Contents

1

Introduction: Immigrant Entrepreneurship Research from a Comparative Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . Cathy Yang Liu

Part I 2

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1

Theories, Patterns, and Contexts of Reception of Immigrant Entrepreneurship

Migrant Entrepreneurship and Urban Development in Global Cities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Lauren W. Forbes and Cathy Yang Liu

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Immigrant Entrepreneurship in Sydney: Australia’s Leading Global City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jock Collins

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Immigrant Entrepreneurship in Hong Kong . . . . . . . . . . . . . . . . . . Biyang Sun and Eric Fong

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Comparative Notes on the Context of Reception and Immigrant Entrepreneurship in New York City, Washington, DC, El Paso, Barcelona, and Paris . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ernesto Castañeda

Part II

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Changing Spaces, Business Clustering, and Placemaking of Immigrant Entrepreneurship

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De-Bunking Myths? International Migrants, Entrepreneurship and the Informal Sector in Gauteng, South Africa . . . . . . . . . . . . . 125 Sally Ann Peberdy

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Migrant Entrepreneurs in Industry Cluster Formation and Innovation: The Case of Semarang, Central Java, Indonesia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 Holi Bina Wijaya, Iwan Rudiarto, and Herlina Kurniawati vii

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Contents

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Business Connections of Migrant Entrepreneurs: Finding a Niche in the Diverse City of Amsterdam . . . . . . . . . . . . . . . . . . . . . . . . . . 175 Juan Francisco Alvarado Valenzuela

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The Impact of Immigrant Entrepreneurship on City Building: Learning from Toronto . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195 Zhixi Cecilia Zhuang

Part III

Global Networks, Local Connections, and Policies of Immigrant Entrepreneurship

10 “Flushing—The Bigger, Better and Downright Sexier Chinatown of New York”: Transnational Growth Coalitions and Immigrant Economies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215 Tarry Hum 11 Grassroots Globalization in the Twenty-First Century’s First 15 Years: New Immigrant Communities in the Political Economy of Asia and Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243 James H. Spencer 12 Revitalizing Urban America Through the EB-5 Immigrant Investor Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265 Edward S. Smith

Editor and Contributors

About the Editor Dr. Cathy Yang Liu is Professor and Chair of the Public Management and Policy Department at the Andrew Young School of Policy Studies, Georgia State University, where she directs and teaches in the Planning and Economic Development Concentration. She conducts research and publishes widely in the areas of community and economic development, urban labor market and inequality, migration and entrepreneurship, as well as international urban development. Dr. Liu currently serves as a managing editor for Journal of Urban Affairs and an associate editor for Economic Development Quarterly. She received her Ph.D. in Urban Planning from the University of Southern California and Master of Public Policy from the University of Chicago.

Contributors Juan Francisco Alvarado Valenzuela Amsterdam University of Applied Sciences, Amsterdam, The Netherlands Ernesto Castañeda Department of Sociology, American University, Washington, DC, USA Jock Collins Business School, University Technology Sydney, Sydney, NSW, Australia Eric Fong Department of Sociology, The University of Hong Kong, Pokfulam Road, Hong Kong Lauren W. Forbes Andrew Young School of Policy Studies, Georgia State University, Atlanta, GA, USA

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Editor and Contributors

Tarry Hum Department of Urban Studies, Queens College, CUNY, New York, NY, USA Herlina Kurniawati Department of Urban and Regional Planning, Diponegoro University, Semarang, Indonesia Cathy Yang Liu Andrew Young School of Policy Studies, Georgia State University, Atlanta, GA, USA Sally Ann Peberdy Independent Researcher and Writer, Dwyran, Isle of Anglesey, United Kingdom; Independent Researcher and Writer, Johannesburg, South Africa; The Annexe, Hendy, Dwyran, Llanfairpwllgwyngyll, Isle of Anglesey, Wales, UK Iwan Rudiarto Department of Urban and Regional Planning, Diponegoro University, Semarang, Indonesia Edward S. Smith Andrew Young School of Policy Studies, Georgia State University, Atlanta, GA, USA James H. Spencer Department of City Planning and Real Estate Development, Clemson University, Clemson, SC, USA Biyang Sun Department of Sociology, The Chinese University of Hong Kong, Shatin, Hong Kong SAR, China Holi Bina Wijaya Department of Urban and Regional Planning, Diponegoro University, Semarang, Indonesia Zhixi Cecilia Zhuang School of Urban and Regional Planning, Ryerson University, Toronto, ON, Canada

Chapter 1

Introduction: Immigrant Entrepreneurship Research from a Comparative Perspective Cathy Yang Liu

Abstract As cities around the world continue to attract both international migrants and domestic migrants into their bustling metropolises, immigrant entrepreneurship emerges as an important urban phenomenon that calls for careful examination. This book assembles 12 chapters that represent case studies from 16 cities, which represent 14 countries and five continents: North America, Europe, Asia, Africa, and Australia. It seeks to advance the literature in several ways. First, a comparative approach is taken to include perspectives from both the Global North and South, West and East, to broaden the theoretical framework in this area, especially pertinent to the emerging economies. Second, it covers multiple scales from local community placemaking to urban contexts of reception, to transnational networks and connections. Third, it engages in numerous disciplinary approaches, research methods, and topical areas including the entry dynamics, trends and patterns, business performance, challenges, and impact of immigrant entrepreneurship in urban areas. Finally, it pays particular attention to federal and urban policies toward immigrant entrepreneurship. Potential future research directions are also identified. Keywords Immigrant entrepreneurship · Urban development · Global cities · Transnational networks · Policy

1.1 Motivation and Overview of the Book It is estimated that there are 272 million international migrants in the world today (World Migration Report 2020). As global cities around the world continue to attract both international migrants and domestic migrants into their bustling metropolises, immigrant entrepreneurship emerges as an important urban phenomenon that calls for careful examination. From Chinatown in New York (Zhou 1992) to Silicon Valley in San Francisco (Saxenien 2007), immigrant-owned businesses are not only changing C. Y. Liu (B) Andrew Young School of Policy Studies, Georgia State University, 14 Marietta Street, Atlanta, GA 30303, USA e-mail: [email protected] © Springer Nature Switzerland AG 2021 C. Y. Liu (ed.), Immigrant Entrepreneurship in Cities, The Urban Book Series, https://doi.org/10.1007/978-3-030-50363-5_1

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the business landscape in their host cities, but also transforming the spatial, economic, social, and cultural form of local communities. The study of immigrant entrepreneurship has accumulated interdisciplinary scholarship in the past decades, ranging from sociology, geography, urban studies, and urban planning to economics, business, and public policy, among others. While this scholarship covers various aspects of immigrant entrepreneurship, this book is particularly interested in how this phenomenon manifests itself in urban areas, and its interaction with the cities along different dimensions. As I step into a Vietnamese nail salon in Atlanta, shop alongside African merchants at Guangzhou’s malls, or enjoy an authentic Szechuan dinner in Amsterdam, it becomes increasingly apparent that the many demographic, cultural, economic, and spatial changes that immigrant entrepreneurs bring to the global cities are vivid. Beyond our personal experiences and daily encounters, however, it is a scholarly inquiry to examine such transformations in a systematic manner to inform our understanding and shed light on planning and policy. While the literature is voluminous for this important inquiry, this book is intended to highlight several important themes and fill some understudied gaps. I will not conduct a comprehensive review of the literature in this introduction as some of it is covered in my coauthored Chap. 2. Excluding this introductory chapter, there are 11 chapters in this book which draw evidence from global cities around the world and explore various dimensions of immigrant entrepreneurship and urban development. It provides a substantive contribution to this literature in several ways. First of all, a comparative approach is taken with case studies from both the Global North and Global South, West and East, to broaden the theoretical framework in this area, especially pertinent to the emerging economies. Second, it covers multiple scales from local community placemaking to urban contexts of reception, to transnational networks and connections. Third, it engages in numerous disciplinary approaches, research methods, and topical areas including the entry dynamics, trends and patterns, business performance, challenges, and impact of immigrant entrepreneurship in urban areas. Finally, it pays particular attention to federal and urban policies toward immigrant entrepreneurship. In this sense, this book attempts to move one step further beyond important existing collections in this broad area, which focuses mostly on the Global North (e.g., Li 2006; Aytar and Rath 2011). As cities in the Global South have increasingly become nodal points for the movement of people, goods, and ideas both internationally (northsouth and south-south) and internally with their rural areas, they will occupy vital positions on the world city map for our discussion of immigrant entrepreneurship. Whether existing theories derived from the Western context can be readily applied to the rest of the world is a question to be tested against emerging urban realities. Comparative analyses that draw evidence from different contexts and different groups have the potential of generating new insights to answer these questions. In what follows, I introduce the chapters in this book, grouped by the several broad themes I identify in this literature.

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1.2 Outline of Themes and Chapters Taking the case studies from all chapters together, this book covers 16 cities around the world, which represent 14 countries and five continents: North America, Europe, Asia, Africa, and Australia, as mapped out in Fig. 1.1. These cities include established multiethnic global cities like New York, London, Amsterdam and Toronto, border town of El Paso, emerging gateways like Washington, DC, as well as cities in Asia (Hong Kong, Ho Chi Minh City, and Semarang), and Africa (Johannesburg and Addis Ababa) that are less represented in this literature. Berlin, Athens, Sydney, Barcelona, and Paris are also discussed. Such a broad coverage of case study areas ensures relatively diverse perspectives from different parts of the world on this topic. Summarizing the chapters as well as the general literature behind them, I divide this book into three parts. Part I. Theories, Patterns, and Contexts of Reception of Immigrant Entrepreneurship A growing literature examines trends and patterns of immigrants’ entrepreneurial behavior, demographic characteristics, and other factors associated with their entrepreneurial motivation and entry, as well as contexts of reception to foster or hinder their entrepreneurial success. An important theoretical framework for understanding the interplay of group characteristics, social networks, contextual conditions, and policy environment of host cities is the “mixed embeddedness” perspective (Kloosterman 2010). While immigrant groups are diverse and local contexts are varied, such interactions and resulting business dynamics are evident in all the case study cities in this part. In many cities around the world, immigrants tend to have a greater propensity toward self-employment than their native-born counterparts, due to a combination

Fig. 1.1 Case study cities covered in this book

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of push and pull factors, and out of necessity or opportunity. In each of the six cities—Toronto, Amsterdam, London, Johannesburg, Berlin, and Athens—examined in Chap. 2, Forbes and Liu showed that immigrant entrepreneurs are diverse in terms of their national origin, educational level, generational status, migratory experiences, and the business sectors that they engage in. They, however, face structural and cultural barriers in operating their businesses which could affect their chosen market and business performance. The multicultural city of Sydney also serves as a good case in point for immigrant entrepreneurship, as Chap. 3 illustrates. Collins provides a detailed portrait of Korean and Muslim entrepreneurs in the city and how they were able to utilize their family, community, and religious networks to overcome potential challenges in business start-ups. A different group worth mentioning is the “refugee entrepreneurs” who find their way into self-employment through resilience and determination despite their relatively low endowments. The Ignite! Refugee small business start-up program established in 2014 also played a positive role in the process. In the Asian entrepôt of Hong Kong, we see a somewhat different demographic composition and economic environment which is reflected in its immigrant entrepreneurship patterns. In Chap. 4, Sun and Fong used the 2016 census microdata to perform a comprehensive analysis of this group composed of China mainlanders (differentiated by those arrived prior to 1997 and after), other East Asians, South Asians, as well as Westerners. While their business concentration and earnings vary, regression analysis shows that those with longer duration in Hong Kong, speak the local language, and have higher educational attainment are more likely to become entrepreneurs, similar to findings from the Western context. With a comparative study of five cities, Chap. 5 demonstrates how local contexts and opportunities help shape immigrant behavior at different times and places. Castaneda took us on a journey to observe New York with Irish, Italian and Jewish influence, El Paso with Mexican investors, Washington, DC neighborhoods where Thai, Ethiopian and central American businesses abound, Barcelona storefronts owned by immigrants from Pakistan, China, the Philippines, and Morocco, as well as Paris boulevards where Desi (southeast Asian) and African shops coexist. It highlights the fact that entrepreneurial attributes are not necessarily “intrinsic” to a group, but stimulated from its interplay with hosting environments and thus can take different forms. For example, Chinese and Mexican immigrants have somewhat different characteristics and perceptions in the American cities versus in Barcelona. Part II. Changing Spaces, Business Clustering, and Placemaking of Immigrant Entrepreneurship While the first part of the book largely focuses on immigrant entrepreneurs themselves, the second part shifts attention to the performance of the businesses they establish and the impact they have on urban spaces and places. Research has traditionally elaborated on immigrant businesses’ reliance on the support, clientele, and workers in ethnic enclaves and their overrepresentation in small-scale main-street establishments such as restaurants and retail shops. Recent accounts, however, start to showcase their contribution to high-skilled professional and high-tech sectors (Liu

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et al. 2015). In addition, their spatial footprints have already reached beyond central cities and ventured into suburban areas (Li 1998; Liu 2012). Chapters in this part speak to such business clustering and spatial dynamics from various locations and perspectives. Post-apartheid South Africa sees the inflow of immigrants from elsewhere in Africa, East Asia, and South Asia. In Chap. 6, Peberdy documents the vibrant new retail landscape created by immigrant entrepreneurs, many of whom operate in the informal economy, in Gauteng’s city centers, suburban areas as well as townships. These businesses reshape urban spaces, generate tax revenue and employment for the local economy, and provide goods and services including food, groceries, clothing, and hairdresser essentials to residents’ daily life. However, their business success was challenged by exclusionary policies and hostile attitudes that attribute some existing societal problems to immigrants’ “trade secrets”. Shifting to Semarang, the capital of central Java, Indonesia, Wijaya, Rudiarto, and Kurniawati described how migrant entrepreneurs play an important role in the city’s industrial cluster innovations in Chap. 7. From metal production to goat cooking and smoked fish, migrant newcomers to the locality are leaders and champions to five of the seven clusters in the area through product diversification, adoption of new equipment, and novel marketing strategies. The “strength of weak ties”, local government, universities, and NGOs also interact with migrant entrepreneurs in achieving such cluster formation and innovation. In this sense, the “mixed embeddedness” framework can potentially help explain Global South phenomenon though via different manifestations. The importance of connections in business start-up and expansion is equally evident in Amsterdam, as Chap. 8 illustrates. Valenzuela adopted network analysis to examine the role of business connections for immigrant entrepreneurs in finding a niche and adapting to the market in a new city. Many of the interviewees are highly skilled immigrants from Western countries, who use similar and diverse connections in terms of nationality, level of education, and place of residence to identify local and global opportunities and refine their business ideas. Even for this elite expat group, language barriers still exist as well as legal, regulatory, and cultural unfamiliarity in their business operations. Paying particular attention to spatial dimension and physical planning implication of immigrant entrepreneurship, Zhuang uses Toronto as an example to portray how ethnic businesses are (re)defining space and (re)shaping communities in Chap. 9. As Toronto’s immigrant communities move outward to suburban areas, they are (re)making the places through ethnic malls, cultural symbols, visual references, and architectural features which signal their identity. While suburban land use is not as inductive to the dense streetscape as central cities, these cultural elements have the effect of creating unique urban dynamics with desirable amenities. However, how to effectively plan for diversity in light of insufficient policy and institutional support proves to be an important task for planners.

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Part III. Global Networks, Local Connections, and Policies of Immigrant Entrepreneurship While immigrant entrepreneurship’s effect on local communities is multifaceted (Liu et al. 2014), its significance in transnational and global networks emerges as a new area of inquiry. Immigrant-owned businesses in the U.S. tend to exhibit a greater tendency toward transnational activities in terms of whether they export, outsource jobs, and have overseas establishments (Wang and Liu 2015). These global networks of capital, people, and information flow into spaces of work, leisure, and consumption in locations near and far, creating “Shanghai on the Flushing River” or Nigerian community in Ho Chi Minh City. Hum painted the bustling Flushing in Queens, New York, with thousands of businesses and a majority Asian population comprising Chinese, Korean, and South Asian immigrants in Chap. 10. A rezoning plan in 2004 resulted in denser residential and commercial development which prompted transnational capital to flow into the area. Asian banks and professional services in real estate, law, and finance are bringing Shanghai into Flushing and changing the neighborhood character. The tension between global consumption trends and local needs pose challenges to the small businesses that used to serve a working-middle class population. South–south connection deepens as Asia and (sub-Saharan) Africa continue to develop their economy and rise on the world stage. In Chap. 11, Spencer analyzes a “mirror image” of two interesting cases of “grassroots globalization”: the Chinese community in Addis Ababa, Ethiopia, and the Nigerian community in Ho Chi Minh City, Vietnam. The neighborhood around Bole airport in Addis Ababa became a middle-class enclave for Chinese technical experts who service the various Chinese transportation and telecommunications companies that operate in Africa. Across the globe, Nigerians and other Africans migrate to Ho Chi Minh city as English teachers, football players, as well as traders and form their communities. These new forms and spaces of immigrant entrepreneurship and global connections will become more widespread and create unprecedented changes in cities of the Global South. While policies and institutional environment at national, urban, and local levels are frequently referred to in all the above chapters, scholarly works on this topic are relatively limited and tend to focus more on best practices and less on the actual impact on policies. As examples, Kloosterman (2003) detailed some policies aimed at increasing openings for immigrant entrepreneurs in the Netherlands, and Rath and Eurofound (2011) gathered policy experiences to promote ethnic entrepreneurship from selected European cities. In the U.S. context, Huang and Liu (2018) introduced the new welcoming cities initiative which seeks to integrate immigrants in urban economic and social fabrics. Our most recent research (Huang and Liu 2019) looks specifically at local efforts to achieve economic development through immigrant entrepreneurship. We examined the policy documents from 16

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selected welcoming cities, especially emerging immigrant gateways, and derived 20 specific programs across five types: information, language, business service, financial support, and place-based approach. We find that the breadth and depth of policy adoption vary: while 16 cities used information hub strategy, only two considered immigrant-friendly financing schemes. As cities vary in their immigrant profile and immigrant business profile, tailored policies are called for to facilitate immigrant entrepreneurship. In Chap. 12, Smith provides a detailed account of the EB-5 Immigrant Investor Program established in the U.S. in 1990. It is an economic development tool designed to attracted foreign investment to revitalize America’s urban areas, especially high unemployment areas and rustbelt industrial cities that suffer from the loss of manufacturing jobs. The Brooklyn Navy Yard was able to raise $60 million of the EB-5 investment, or over 40% of total capital stock, for its redevelopment project, attesting to a story of “immigrant growth machine”. However, the future is uncertain for this federal policy as ongoing debate considers raising the investment threshold for this visa program from the current 1 to 1.8 million (for high unemployment area from 0.5 to 0.9 million).

1.3 Future Research Directions To summarize, this book with its 12 chapters offers a comparative collection of immigrant entrepreneurship in global cities. It particularly accommodates views from the Global South and Global East which were traditionally understudied but have become increasingly significant in this discourse. Several chapters perform comparative analysis within their chapters and demonstrate the value of seeking similarities and differences. The important question to ask in such inquiries would be: what to compare? Is it the same groups in different places, different groups in the same places, or different processes in similar conditions? The list can go on. Such “compare and contrast” can generate meaningful insights to pinpoint the group-specific, place-specific, or process-specific mechanisms in effect. Going forward, there are several potential directions I would like to suggest. First, migration flows have become more multidirectional in the current world— North-South, South-South, South-North, and North-North—forming a complex web of networks. Previous single-group enclaves are turned into multiethnic communities, as chapters in this book illustrate. These emerging urban realities, especially happening in places that are not historically immigrant-receiving destinations, call for new research agenda. Second, various methodological approaches can be adopted to examine immigrant entrepreneurship: from secondary census data analysis to primary data collection through surveys, interviews, and field observations. Chapter 8 uses network analysis to generate interesting findings regarding immigrants’ connections in business startups. Some recent research uses cartography and data visualization tools to map out spatially bounded immigrant urbanism (e.g., Kim 2012). While some secondary

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datasets like American Community Survey data, Survey of Business Owners (SBO) data, Eurostat data, and other national census microdata are publicly available, they usually do not contain all the desirable variables pertaining to entrepreneurs and their businesses. Cross-country comparative research would be especially difficult as questionnaires are not compatible across nations. Thus, multisite collaborative data collection will have the potential to gather directly comparable information for different contexts. Third, there is a lack of evidence on the relative effectiveness of local policies toward immigrant entrepreneurship. Part of the reason is that these policies are relatively new and limited in scale, making any formal evaluation difficult. As we collect more best practices of local programs, evaluation analysis would be able to demonstrate the relative cost-effectiveness of these programs, their impact on businesses, and ultimately guide future policy design. In closing, I hope this book opens a new window toward our understanding of immigrant entrepreneurship and urban development on various scales, from different perspectives, and for cities in Global North and South. Future research along these directions have the potential to advance scholarship and practice on this topic in important ways.

References Aytar V, Rath J (eds) (2011) Selling ethnic neighborhoods: the rise of neighborhoods of leisure and consumption. Routledge Huang X, Liu CY (2018) Welcoming cities: immigration policy at the local government level. Urban Aff Rev 54(1):3–32 Huang X, Liu CY (2019) Immigrant entrepreneurship and economic development: a local policy perspective. J Am Plann Assoc 85(4):564–584 International Organization for Migration (IOM) (2019) World migration report 2020. Available online https://publications.iom.int/books/world-migration-report-2020 Kim A (2012) Introducing the mixed-use sidewalk: vending the property rights in public space. J Am Plann Assoc 78(3):1–14 Kloosterman R (2010) Matching opportunities with resources: a framework for analyzing (migrant) entrepreneurship from a mixed embeddedness perspective. Entrepreneurship Reg Dev 22(1):25– 45 Kloosterman RC (2003) Creating opportunities. Policies aimed at increasing openings for immigrant entrepreneurs in the Netherlands. Entrepreneurship Reg Dev 15(2):167–181 Li W (1998) Anatomy of a new ethnic settlement: the Chinese Ethnoburb in Los Angeles. Urban Stud 35(3):479–501 Li W (ed) (2006) From urban enclave to ethnic suburb: new Asian communities in Pacific Rim Countries. University of Hawaii Press Liu CY (2012) Intrametropolitan opportunity structure and the self-employment of Asian and Latino immigrants. Econ Dev Quart 26(2):178–192 Liu CY, Miller J, Wang Q (2014) Ethnic enterprises and community development. Geo J 79(5):565– 576 Liu CY, Painter G, Wang Q (2015) Immigrant entrepreneurship and agglomeration in high-tech industries in the U.S. In: Karlsson C, Gråsjö U, Wixe S (eds) Innovation and entrepreneurship in

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the global economy: knowledge, technology and internationalization. Edward Elgar, Cheltenham, pp 184–209 Rath J, Eurofound (2011) Promoting ethnic entrepreneurship in European cities. Office of the European Union, Luxembourg Saxenian A (2007) The new argonauts: regional advantage in a global economy. Harvard University Press Wang Q, Liu CY (2015) Transnational activities of immigrant-owned firms and their performances in the USA. Small Bus Econ 44(2):345–359 Zhou M (1992) Chinatown: the socioeconomic potential of an urban enclave. Temple University Press

Part I

Theories, Patterns, and Contexts of Reception of Immigrant Entrepreneurship

Chapter 2

Migrant Entrepreneurship and Urban Development in Global Cities Lauren W. Forbes and Cathy Yang Liu

Abstract In this chapter, we review the current state of knowledge on migrant entrepreneurship including various conceptual frameworks about entrepreneurial activities and urban development in the global cities in which migrant entrepreneurship occurs. We also provide a comparative analysis of migrant entrepreneurship in six global cities (Amsterdam, London, Berlin, Toronto, Johannesburg, and Athens), illustrating how this phenomenon varies across racial/ethnic groups and across urban economic, social, and political contexts. Lastly, we discuss the impact of migrant businesses and key challenges facing migrant entrepreneurs along with knowledge gaps in the field and suggestions for future research. Keywords Migrant entrepreneurship · Global city · Emerging economy · Comparative analysis · Globalization · Urban development

2.1 Introduction The past four decades have been marked by unprecedented sociocultural and geopolitical changes in urban areas around the world. Enabled by the ascendancy of digital and creative economies, these changes have created more multicultural and globalized societies, and they are paralleled by structural transformations in the urban economic landscape. Together, these shifts have precipitated the rise of global cities into a new level of international prominence (Duncan and Popp 2017; Sassen 2005). While in the past, nation-states were the center of governmental power, much of that authority today is shared, perhaps somewhat begrudgingly, between nations and the leading global cities situated within their boundaries (Sassen 2005). Importantly,

L. W. Forbes (B) · C. Y. Liu Andrew Young School of Policy Studies, Georgia State University, 14 Marietta Street, Atlanta, GA 30303, USA e-mail: [email protected] C. Y. Liu e-mail: [email protected] © Springer Nature Switzerland AG 2021 C. Y. Liu (ed.), Immigrant Entrepreneurship in Cities, The Urban Book Series, https://doi.org/10.1007/978-3-030-50363-5_2

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these cities shape the environment in which residents live as well as the social, economic, and political contexts in which immigrants arrive. While global migration is far from a new phenomenon, the trends and impact of contemporary migration in global cities as well as the sociopolitical climate in which it occurs present new challenges and opportunities for local policymakers. Cities like London, New York, and Amsterdam which have experienced high levels of migration for centuries (Baycan-Levent and Nijkamp 2009; Cities for Local Integration Policy 2011) are well-suited to respond to contemporary migration patterns, while new migratory hubs like Guangzhou, China (Liu and Chen 2015) and Atlanta, Georgia are strategizing new ways to respond to the influx of international migrants. Despite some opposition, there is widespread recognition among many of these localities that immigrants generally make positive contributions to their host cities, in part through the impact of their entrepreneurship activities (Duncan and Popp 2017; Marchand and Siegel 2015; Price 2014). Beyond simply filling industry positions in the hardlabor and high-skilled sectors that native-born residents in Western cities are often unwilling or unable to fill, migrants in nearly every global city engage in entrepreneurship at higher rates than their native-born counterparts (Baycan-Levent and Nijkamp 2009; Desiderio 2014; Dheer 2018; Marchand and Siegel 2015; New American Economy 2012). Migrant entrepreneurs also tend to innovate more in their businesses (Dheer 2018; Nathan and Lee 2013; New American Economy 2012), utilize transnational business networks at higher rates (Maas 2005; Ojo 2012; Portes and Yiu 2013; Wang and Liu 2015), expand the product diversity of local markets (Dheer 2018), and contribute to the economic development of divested neighborhoods (Aytar and Rath 2012; Liu et al. 2010). Municipal governments that recognize the contributions of migrant entrepreneurs to the economic and cultural fabric of their cities are now adopting policies designed to create an inclusive and “welcoming” environment that migrants will find attractive (Cities for Local Integration Policy Network 2011; Desiderio 2014; Marchand and Siegel 2015). Of course, these policies are not without controversy and trade-offs; resultingly, local policymakers and urban planners in global cities are tasked with the challenge of balancing often discordant interests while still ensuring that their city is globally competitive. This chapter introduces the topic of migrant entrepreneurship in global cities and provides an overview of the state of knowledge on this subject, including the scope and common theoretical frameworks of migrant entrepreneurship research, a comparative analysis of select global cities, and a discussion of emerging areas of study. In the first section, we will establish the definitions of key concepts and provide a typology of global cities followed by a discussion of the central theories guiding migrant entrepreneurship research. Next, we will profile six global cities (Amsterdam, London, Berlin, Toronto, Johannesburg, and Athens) based on our research and compare how entrepreneurship is manifested in these cities among various migrant groups. Lastly, we will cover the impact of migrant entrepreneurship in global cities and important areas for future study.

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2.2 Scope and Definitions Before broaching the subject of migrant entrepreneurship, let us first set the parameters of this discussion with a few definitions. What exactly is an entrepreneur? We define an “entrepreneur” as Wennekers and Thurik (1999) propose: “a person perceiving and creating new economic opportunities and introducing their ideas into the market, in the face of uncertainty and other obstacles” (Marchand and Siegel 2015). Notably, this definition does not distinguish entrepreneurs by education or skillset, but rather it emphasizes their ambition, astuteness and willingness to take risks. Entrepreneurs leverage their resources, however vast or meager they may be, to create a business that ultimately brings some instrumental and/or symbolic fulfillment to themselves, and often, to the broader community around them. While some scholars suggest an implicit class hierarchy by differentiating “entrepreneurs” from those who are simply “self-employed”, we do not differentiate these groups here (Ahmad and Seymour 2012; Williams and Nadin 2011). Some scholars also suggest that the informal economy is an alternative entrepreneurial domain (Callaghan and Venter 2011; Debrah 2007; Snyder 2004). Where relevant, we will differentiate between the formality of entrepreneurship, but the terms “self-employment”, “entrepreneur”, and variations of both terms are used interchangeably in this chapter. Table 2.1 provides a synopsis of the evolution of the concept of an entrepreneur in the academic literature, highlighting its conceptual shift from being a passive recipient of market forces to a change agent shaping the market context in which he/she operates (Ahmad and Seymour 2012). Our use of the term “informal economy” refers primarily to the legal status of an entrepreneur’s business operation in a host city as opposed to the legality of his/her business activity (Light 2004; Williams and Nadin 2011). Light (2004) and Williams and Nadin (2011) suggest that public perception plays a significant role in shaping entrepreneurial activities by determining which are deemed “informal”—a distinction that can have major implications on business sustainability, depending on the local context. In emerging economies such as Johannesburg, South Africa and Athens, Greece where informal entrepreneurial activity flourishes, interaction with these types of migrant businesses is part of the daily lives of many city residents, and they have, perhaps ironically, become a characteristic feature of many local economies (Balampanidis et al. 2016; Hart 2006; Herrington and Kelley 2012; Light 2004; Peberdy 2016). Further, we intentionally use the term “migrant” rather than “immigrant” in order to be inclusive of both intranational migration patterns from rural areas to urban city centers (Levie 2007; White 2009) and the second- and third-generation immigrants whose ethnic heritage is non-native to the host city. Similar terms like “ethnic entrepreneur” and “minority entrepreneur” have also be used in the literature on migrant entrepreneurship (Dheer 2018; Sonfield 2005; Zhou 2004). These terms generally refer to entrepreneurs with a shared cultural heritage (e.g., Central Americans and Koreans) or group identity (e.g., women, youth, and second generation).

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Table 2.1 Entrepreneur definitions Essence of definition

Publication

Entrepreneurs buy at certain prices in the present Cantillion (1755/1931) and sell at uncertain prices in the future. The entrepreneur is a bearer of uncertainty Entrepreneurs are “projectors”

Defoe (1887/2001)

Entrepreneurs attempt to predict and act upon change within markets. The entrepreneur bears the uncertainty of market dynamics

Knight (1921, 1942)

The entrepreneur is the person who maintains immunity from control of rational bureaucratic knowledge

Weber (1947)

The entrepreneur is the innovator who implements change within markets through the carrying out of new combinations. These can take several forms: The introduction of a good or quality thereof The introduction of a new method of production The opening of a new market The conquest of a new source of supply of new materials or parts The carrying out of the new organization of any industry

Schumpeter (1934)

The entrepreneur is always a speculator. He Von Mises (1949/1996) deals with the uncertain conditions of the future. His success or failure depends on the correctness of his anticipation of uncertain events. If he fails in his understanding of things to come, he is doomed The entrepreneur is coordinator and arbitrageur

Walras (1954)

Entrepreneurial activity involves identifying opportunities within the economic system

Penrose (1959/1980)

The entrepreneur recognizes and acts upon profit Kirzner (1973) opportunities, essentially an arbitrageur Entrepreneurship is the act of innovation Drucker (1985) involving endowing existing resources with new wealth-producing capacity The essential act of entrepreneurship is a new Lumpkin and Dess (1996) entry. New entry can be accomplished by entering new or established markets with new or existing goods or services. New entry is the act of launching a new venture either by a start-up firm, through an existing firm or via “internal corporate venturing” (continued)

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Table 2.1 (continued) Essence of definition

Publication

The field of entrepreneurship involves the study of sources of opportunities; the processes of discovery, evaluation, and exploitation of opportunities; and the set of individuals who discover, evaluate, and exploit them

Shane and Venkataraman (2000)

Entrepreneurship is a context-dependent social process through which individuals and teams create wealth by bringing together unique packages of resources to exploit marketplace opportunities

Ireland, Hitt or Sirmon (2003)

Entrepreneurship is the mindset and process to create and develop economic activity by blending risk-taking, creativity, and/or innovation with sound management, within a new or an existing organization

Commission of the European Communities (2003)

Source: Ahmad and Seymour (2012, Chap. 3, p. 35)

These categories often overlap with migration status and are sometimes ambiguous, especially in large, diverse cities with long immigration histories. Additionally, “transnational” entrepreneurs have emerged in the literature recently as an important entrepreneurial subgroup (Drori et al. 2009; Fransen et al. 2017; Miera 2017; Portes et al. 2001; Rušinovi´c 2006; Sequeira et al. 2009; Zhou 2010). Transnational entrepreneurs implement business activities “in a cross-national context” and are “embedded in at least two different social and economic areas” (Drori et al. 2009, p. 1001). One example of this is the German-Polish Aussiedlers whose ethnic heritage and supply-chain networks enable them to be fully operational in both localities (Miera 2017). For the Aussiedler entrepreneurs, the sociopolitical relationship between Germany and Poland as fellow EU members also opens the door for ease of migration between Warsaw and Berlin (Hillmann 2009; Miera 2017). Similarly, a large portion of migrant businesses in Johannesburg are operated by African migrants from Zimbabwe, Mozambique, and other SADC countries (Agadjanian 2008; Peberdy 2016; Zuberi and Sibanda 2004), many of whom travel, relatively unobstructed, between Johannesburg and their home countries. However, the ease of travel for SADC migrants is likely less a product of political relationships between neighboring countries than a reflection of the relatively porous borders between South Africa and its neighbors (Facchini et al. 2013). Thus, cross-border migration enables transnational entrepreneurs to leverage their regional network ties and markets for maximal business success, making them an important subgroup of migrant entrepreneurship.

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2.3 Global Cities and Emerging Economies The concept of a “global city” is often used to describe major cities with an international presence that are not only economically prosperous and highly globalized, but also conspicuously cosmopolitan, attracting both internal and external migrants. The term was first introduced by Sassen (1991, 2005) to highlight the international prominence and importance of certain cities to the global economy (IOM 2015). Differentiating them from the similar concepts of “world cities” and “nation-states”, Sassen indicates the unique and central role that these cities play on the global stage as hubs of international trade and cultural exchange. Although the list of global cities is hotly contested (McEwan et al. 2005), few would dispute that London and New York are among the quintessential “global cities” (Nathan and Lee 2013; Sassen 1991). Their unparalleled influence in the global marketplace, long histories as migration destinations, and the presence of large, highly diverse migrant populations within their jurisdictions make both of these localities nexuses of migrant entrepreneurship. Another category of global cities is “emerging economies”, which can broadly be defined as major cities in developing and middle-income countries whose economies demonstrate characteristics of both developed and developing nations. Together, middle-income nations represent approximately one-third of the global GDP (World Bank 2019)—much of which is generated by commercial activities happening in emerging economies. This category of global cities has been drawing increasing interest from a number of stakeholders including international investors, government agencies, and academicians (IOM 2015; World Bank 2019). The countries with the leading emerging economies—Brazil, Russia, India, and China—are commonly known by the acronym BRICS (Dahlman 2010; De Beer et al. 2014; Lawson and Purushothaman 2003; Samans et al. 2015), with several scholars including South Africa among them (De Beer et al. 2014; Herrington and Kelley 2012; Nathan and Lee 2013). Cities that are often classified as emerging economies include, inter alia, Moscow (White 2009), Guangzhou (Liu and Chen 2015), São Paulo (Benton-Short et al. 2005; IOM 2015), Delhi (Dupont 2011), and Johannesburg (Peberdy et al. 2004; Peberdy 2016). These emerging economies are not only spearheading local economic development, but also, through their growth, they may be enabling their respective nations to ascend the ladder of international significance.

2.4 Theories on Migrant Entrepreneurship As a global economic recession and labor market restructuring began to transform the international economic landscape in the 1970s (Baycan-Levent and Nijkamp 2009), migrant entrepreneurship, soon after, began to emerge in the scholarly literature as an important area of study (Dheer 2018). Today, the field has produced a rich compendium of theoretical and empirical research exploring the motivations, strategies, and implications of migrant entrepreneurship at both the country and city

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Fig. 2.1 Motivators and outcome determinants of entrepreneurial decision-making. Source: Marchand and Siegel (2015)

levels. This work has primarily focused on low-skilled migrants from the Global South who migrated to the Global North, and it largely contains research from and about the Western context (Aliaga-Isla and Rialp 2013; Dheer 2018). In recent years, migrant entrepreneurship scholars have produced more literature exploring city and neighborhood-level dynamics (Rath and Aytar 2012; Parzer and Huber 2015; Zhuang 2015) within traditional global cities and emerging economies (Benton-Short et al. 2005; De Beer et al. 2014; Liu and Chen 2015; Peberdy 2016; White 2009). In a 2015 report by the International Organization for Migration, authors Marchand and Siegel (2015) categorize the factors motivating migrants to launch businesses into three groups: personal characteristics, market conditions, and policies and programs. These dimensions are analogous to Sahin’s (2012) entrepreneurship motivation framework which consists of the culture of the migrant entrepreneur, the economic environment of the host city, and the reactions of migrants to discrimination and other barriers (Kourtit et al. 2016). These endogenous and exogenous factors are highly interdependent, and they shape the decision-making context of prospective entrepreneurs. Figure 2.1 depicts the Marchand and Siegel framework, and in Table 2.2 we use it to classify the major theories about migrant entrepreneurship.

2.4.1 General Frameworks of Entrepreneurial Motivation Among the most common frameworks used to characterize migrant entrepreneurship are the parallel dichotomies of “push and pull” factors (Kariv et al. 2009) and “necessity and opportunity” entrepreneurs (Liu and Huang 2016; Urban 2012). “Push” factors such as low educational attainment, temporary residency status, labor market discrimination, and precarious employment may leave an individual with a few alternative options beyond self-employment to sustain themselves and their families (McDowell et al. 2009; Watt 2003) because they often preclude a migrant’s

Market conditions

Discrimination theories Blocked mobility theory/ disadvantage theory

• • • •

• Cultural values (e.g., family tradition, religious ties, and trust) • Cultural insights (e.g., ethnic-specific skills)

Cultural theories • Cultural thesis • Ethnic resources thesis

Economic downturn Precarious labor market Ethnic penalty factors Racial/ethnic prejudice

Sex Race/ethnicity Educational attainment Social networks Income/assets Marital status Expertise Autonomy

• • • • • • • •

Personal characteristics

Example constructs

Theory

Capital theories • Human capital • Social capital • Financial capital • Cultural capital

Category

Table 2.2 Migrant entrepreneurship—major theoretical frameworks

(continued)

Basu and Altinay (2002), Grant and Thompson (2015), Hammarstedt (2001), Hart (2009), Kloosterman (2003), Kontos (2003), Light (1972), McDowell et al. (2009), Piperopoulos (2010), Price and Chacko (2009), Singh and DeNoble (2004), Teixeira et al. (2007) and Wauters and Lambrecht (2008)

Aliaga-Isla and Rialp (2013), Basu and Altinay (2002), Bonacich (1973), Light (1979), Liu et al. (2010), Kim and Hurh (1985), Plüss (2005), Portes and Yiu (2013), Sahin et al. (2006), Teixeira et al. (2007), Ward (1983) and Werbner (1990)

Basu (2004), Basu and Altinay (2002), Boyd (1998), Essers et al. (2010), Fairlie (2012), Hammarstedt (2001), Khosravi (1999), Light (1972), Sanders and Nee (1996), Singh and DeNoble (2004), Wauters and Lambrecht (2008)

Citations

20 L. W. Forbes and C. Y. Liu

• Mixed embeddedness • Social equity perspective • Necessity/opportunity entrepreneurs

Other

Ethnic parades Ethnic districts Cultural festival Local cultural “appetite” Ethnomarketing Special migration visas (e.g., H1B)

• • • • •

Reason for migration Time until start-up Entrepreneurial history Social, political, and economic climate Migration policy infrastructure

• Labor supply channels • Insider knowledge of co-ethnic clientele • Ethnic goods supply chain with the home country • Access to credit/capital • Business formalization

• • • • • •

Abada et al. (2012), Herrington and Kelley (2012), Kloosterman et al. (1999), Sahin et al. (2014)

Aldrich et al. (1985), Glick Schiller (1999), Light (1972), Liu (2012), Portes et al. (2002), Portes (1999), Vertovec (1999), Williams and Nadin (2011) and Zhou (2004)

Aytar and Rath (2012), CLIP (2011), Collins and Kunz (2009), Desiderio (2014), Fairlie and Lofstron (2015), Hillmann (2009), Ireland (2004, 2006), Kontos (2003), OECD (2010), Price (2014) and Zukin (1995)

Aldrich and Waldinger (1990), Kloosterman (2010), Liu (2012), Liu and Huang (2016), Marchand and Siegel (2015), Piperopoulos, (2010), Rušinovi´c (2006) and Sahin et al. (2014)

Citations

Categories are broadly based on Marchand and Siegel (2015). “Other” category reflects theories and frameworks that clearly do not fit into a single category and are not necessarily reflective of their significance in the migrant entrepreneurial literature. Other listed theories here could also be cross-listed in other categories

• Enclave/protected market • Middleman minority/dual labor market • Breakout strategy • Informal economy • Transnationalism

Business strategies

Acculturation/Assimilation Multiculturalism Festivalization/Marketization Cultural consumption Supply-side migration policies

• • • • •

Opportunity structures thesis

Emergence of new markets Accessibility of needed materials Labor market segmentation Product market Financial market Colonial history

Example constructs • • • • • •

Theory

Policies and programs

Category

Table 2.2 (continued)

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ability to obtain formal employment and earn a living. In such cases, entrepreneurship may be the last resort of these individuals to avoid abject poverty and social dependence. The term “necessity” is also often used in reference to this group, indicating that their self-employment activities are largely a product of their challenging circumstances rather than a manifestation of their latent business aspirations. “Pull” factors, on the other hand, generally refer to entrepreneurs with more resources who recognize and seize business opportunities by leveraging their creativity, capital, and social networks in the establishment of their business (Basu and Altinay 2002; Baycan-Levent and Nijkamp 2009; Dheer 2018; Kariv et al. 2009). They are often attracted to entrepreneurship in the host city by the favorable market conditions and policy environment (e.g., tax breaks for new businesses, the presence of business incubators geared toward migrants, and market demand), which facilitate the birth of new businesses. Many of these migrants have prior entrepreneurial experience in their home countries (Basu and Altinay 2002) and/or years of onthe-job experience from wage employment in a particular industry, which can also “pull” them towards entrepreneurship in the host city. Examples of pull factors motivating business initiation among migrants include, inter alia, the possession of unique product or market insight, which can provide a distinct market advantage in an ethnic niche sector (Fairlie and Meyer 1996; Wang and Liu 2015); unmet local demand, which is conducive to firm entry; a large co-ethnic population from which a migrant entrepreneur can source inexpensive labor and other resources (Teixeira et al. 2007); and favorable business administration policies, which help to minimize the amount of bureacratic red tape encountered by new start-ups (Desiderio 2014).

2.4.2 Personal Characteristics as Entrepreneurial Motivators Under Marchand and Siegel’s (2015) tripartite classification of personal, market, and policy-related determinants of entrepreneurship, the dominant theories about personal characteristics that motivate migrants to establish businesses are capital and cultural theories. Capital theories emphasize how a migrant’s personal assets such as their educational attainment, financial capital, and social networks influence their decision to pursue entrepreneurship (Light 1984; Achidi Ndofor and Priem 2011). The presence of these resources plays an important role in motivating both necessity and opportunity entrepreneurs to open businesses. For the former group, the absence of these personal assets may push them into entrepreneurship out of necessity, whereas possession of these resources may explain why the latter group pursues entrepreneurship. Cultural theories are also widely used to explain the overrepresentation of migrants in entrepreneurship. Examples of these include a migrant’s cultural values and product insights (Basu and Altinay 2002; Boyd 1998). Cultural values could include a desire for economic autonomy, patriarchy, and communality, all of which can foster co-ethnic lending and employment in ethnic enclaves. Cultural insights include any specialized knowledge, whether perceived or actual, that a migrant has about an ethnic

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product or market which provides them with a level of expertise and authenticity (Achidi Ndofor and Priem 2011; Collins and Kunz 2009). These and other cultural motivators are sometimes referred to as “ethnic resources”, (Deakins et al. 2007; Fong et al. 2005; Light 1984; Piperopoulos 2010; Sanders and Nee 1996), which some scholars believe offer a unique market advantage, especially for businesses in low-skilled sectors and ethnic niche markets. High-skilled sectors like information technology and law generally require no specialized cultural knowledge, but other types of ethnic resources may still be relevant to migrant entrepreneurs operating in these sectors.

2.4.3 Market Conditions as Entrepreneurial Motivators Among the entrepreneurial motivators that reflect market conditions in the host city, discrimination theories such as the blocked mobility thesis (Basu and Altinay 2002; Grant and Thompson 2015; Kloosterman 2003; Light 1972; Piperopoulos 2010; Price and Chacko 2009; Teixeira 2001; Wauters and Lambrecht 2008) and the opportunity structures thesis (Barrett et al. 2001; Iyer and Shapiro 1999; Raijman and Tienda 2003; Sriram et al. 2007) are among the most widely referenced. Teixeira (2001, p. 2057) describes the blocked mobility thesis as “structural forces that block ethnic minorities’ advancement in mainstream economic markets, channeling them into entrepreneurship as their primary avenue for economic prosperity”. In this sense, blocked mobility is a push factor motivating a migrant to pursue self-employment by excluding him or her from other traditional economic channels. An example of this is institutional discrimination in the labor and financial markets, which is commonly reported among visible minority groups in many global cities (Teixeira et al. 2007; Bates and Robb 2013). These structural barriers can inhibit the ability of migrants to successfully integrate into the economic context of the host cities and can hinder their ability to launch sustainable businesses (Ojo 2012; Teixeira et al. 2007). In contrast, opportunity structures refer to a confluence of factors conducive to entrepreneurship that are related to the nature of the environment in which migrants live and the areas where they create a system for business success (Piperopoulos 2010). For many migrants, especially first-generation immigrants and close-knit ethnic groups like Somalis (Grant and Thompson 2015) and Pakistanis (Halkias 2013), the opportunity structure is a spatially-clustered environment of residences and co-ethnic businesses in which co-ethnic hiring and training circuits exist. These structures of the enclave enable the transfer of specialized knowledge and the acquisition of low-cost, specialized labor; co-ethnic lending, which can reduce financial transaction expenses and enable migrants to bypass institutional lending barriers in host cities; and exclusive access to co-ethnic consumer markets which provide a consistent customer base. These opportunity systems enable new start-ups to emerge within the “protected market” (Light 1972; Liu 2012) of the enclave economy where many migrant businesses begin before expanding to the mainstream economy.

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2.4.4 Policies and Programs as Entrepreneurial Motivators The third and perhaps least theoretically developed category of factors that influence migrant entrepreneurship are government policies and programs (Marchand and Siegel 2015). Generally, these policies and programs exist along an acculturation–multiculturalism continuum, which suggests a tension in political ideologies between the desire to see immigrants “adapt to the host or majority culture” and yet “preserve and promote aspects of their original heritage” (Augustina and Beilin 2012; Cleveland et al. 2009, p. 197). The application of Berry’s (1980) acculturation framework suggests four possible outcomes of these types of policies—integration, assimilation, segregation, and marginalization (Konig 2009; Agustina and Beilin 2012). Most would agree that these latter two outcomes are at least undesirable if not unjust; however, the contention between policies of integration and assimilation continues to be hotly debated (Cities for Local Integration Policy 2011; Desiderio 2014; Marchand and Siegel 2015). Another contemporary theory of migrant entrepreneurship, mixed embeddedness, merges both the contextual and personal elements motivating business start-ups. Developed by Kloosterman et al. (1999), mixed embeddedness posits that migrant entrepreneurial behaviors are contingent upon an interdependent system of contextual factors that interact with the personal characteristics and resources of the individual. Specifically, this theory calls attention to the role of “demand-side” political and economic factors in a host city as well as the social networks in which migrants are embedded as important motivators to entrepreneurship (Kloosterman and Rath 2003; Miera 2017). These factors may not only shape an entrepreneur’s scope of decisionmaking but also their perception of what is optimal for their business. One example of this is the national and local political climate toward immigration and foreign trade, which intersects with international trade agreements that may or may not be favorable for certain migrant businesses, depending on the migrant’s own personal and business characteristics (e.g., country of origin, use of transnational networks, volume of exports/imports).

2.5 A Comparative Analysis of Six Global Cities 2.5.1 Methodology In the subsequent sections, we provide a comparative analysis of migrant entrepreneurship in six global cities: London, Amsterdam, Berlin, Toronto, Johannesburg, and Athens. This analysis is based on a literature review that we conducted between October 2017 and August 2018 which consisted of over 90 publications including peer-reviewed journal articles, working papers, and institutional reports on migrant entrepreneurship at both the local and national levels. We used Google Scholar as well as journal-specific searches in Urban Studies and the International

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Journal of Urban and Regional Research, which are journals known to publish literature on the business dynamics of immigrants in the urban context. Search terms included but were not limited to “immigrant”, “migrant”, “global”, “urban”, “city”, and various derivations of the terms “self -employed” and “entrepreneur”. Inclusion criteria included English publications written after 1985 with most focus given to publications after 2000. These cutoff dates were applied loosely so as to ensure that widely cited research in the field (e.g., Light 1972) was not excluded and that relatively recent literature was well represented. The cities included in our study were selected not only because of the sizeable volume of current literature available on them, but also because of the variety of political and economic contexts that they represent, which have implications on migrant business activity. Obviously, this review is neither a comprehensive examination of the selected cities nor is it reflective of all the localities where migrant entrepreneurship is occurring. For example, Western nations are clearly overrepresented among our comparison cities as they may be in the broader migrant entrepreneurship literature (Benton-Short et al. 2005; IOM 2015). However, this analysis can help to illuminate trends and distinctions across these cities that may be applicable beyond the Western context and can help to catalyze further migrant entrepreneurship research in other world regions.

2.5.2 Historical Global Cities: London and Amsterdam The six focal cities in our research fall into three categories: historical global cities, secondary global cities, and emerging economies. Table 2.3 provides a summary of the key demographic characteristics of these cities, and Fig. 2.2 illustrates the concentration of migrants in these global cities relative to their concentrations in their respective host nations. We refer to London and Amsterdam as “historical” global cities because, in addition to their significant roles in international commerce, both cities have long histories of international migration, and resultantly, migrants constitute a substantial proportion of the population in both localities. Approximately half of the U.K’s foreign-born population live in London (McDowell et al. 2009; Salt and Millar 2006), accounting for nearly 40% of the city’s total population in 2015 (City of London 2017; IOM 2015). Similarly, in Amsterdam migrants account for approximately 38% of the city’s population (IOM 2015). Both Amsterdam and London are among the leading economic and sociocultural powerhouses of the global economy (IOM 2015; Sassen 1991; Shachar 1994), and migrant entrepreneurship is central to fueling those engines. Migrant businesses in London contribute approximately 20% of the city’s GDP, although migrants represent only 13% of all self-employed workers (McDowell et al. 2009; Spence 2005). Similarly, Nijkamp et al. (2010) estimate a sizable impact of migrant businesses in Amsterdam, finding that one in five businesses there is started by a migrant entrepreneur. Between 1999 and 2004, a period marked by a national economic recession, the growth rate for migrant businesses in the city was 44% compared to 2% for native-born Dutch entrepreneurs (Nijkamp et al. 2010).

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Table 2.3 Comparison of cities at a glance City

Country

Total City Entrepreneurship Migrant population foreign-born rate (total) entrepreneurship (city) population rate (out of total)

Toronto

Canada

2.93 million (2017)

Amsterdam

Netherlands

London

U.K.

46% (2011)

11% (2006)

12.9% (2006)

1.6 million 34.8% (2016) (2016)

16.7% (2018)*

~33% (2011)

8.77 million (2017)

41% (2017)

19.3% (2011)

46.1% (2011)

Johannesburg South Africa 8 million (2016)

6.70% (2001)

11% (2013)

17% (2013)

Berlin

Germany

3.613 million (2017)

27.7% (2015)

9.9% (2018)

49% (2015)

Athens

Greece

3.75 million (2012)

11% (2005)

33.5% (2018)*