Social Capital, Geography, and Survival: Gujarati Immigrant Entrepreneurs in the U.S. Lodging Industry

Immigrant entrepreneurs often rely on their group's local social capital in their new home market to establish and maintain their businesses. In particular, immigrant entrepreneurs with few resources of their own receive help from those possessing more resources. Supporting these arguments usin...

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Bibliographic Details
Published in:Management science 2006-02, Vol.52 (2), p.233-247
Main Authors: Kalnins, Arturs, Chung, Wilbur
Format: Article
Language:English
Subjects:
Collateral
Corporate strategies
Economic resources
Entrepreneurs
Entrepreneurship
Ethnic groups
Franchising
Geography
Gujarati
Hotel chains
Hotel industry
Hotels
Hotels & motels
immigrant entrepreneurs
Immigrants
Management science
Minority & ethnic groups
Motels
Noncitizens
Reputations
Social capital
Social structure
Studies
survival
U.S.A
ZIP codes
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Summary:Immigrant entrepreneurs often rely on their group's local social capital in their new home market to establish and maintain their businesses. In particular, immigrant entrepreneurs with few resources of their own receive help from those possessing more resources. Supporting these arguments using the empirical setting of Gujarati immigrant entrepreneurs in the lodging industry, we find that the likelihood of survival of an immigrant entrepreneur's hotel increases when surrounded by higher counts of branded hotels (representing high-resource establishments) owned by individuals from their ethnic group but is unaffected by unbranded motels (representing low-resource establishments) owned by members of their ethnic group or by branded hotels owned by individuals from other ethnic groups. These results isolate and reinforce the importance of social capital not only for immigrant entrepreneurs but also more generally for any entrepreneurs belonging to ethnic, professional, religious, or social groups.
ISSN:0025-1909
1526-5501
DOI:10.1287/mnsc.1050.0481