IMPACT OF EMBEDDEDNESS IN ETHNIC NETWORKS ON BUSINESS GROWTH: EVIDENCE FROM CHINESE IMMIGRANT ENTREPRENEURS IN AUSTRALIA (INTERACTIVE PAPER)

Immigrant entrepreneurs tend to start business within their ethnic enclave, as it is an integral part of their social and cultural context and the location where ethnic resources reside. Wu and Choi (2004) observe that Chinese immigrant entrepreneurs organize economic activities based on trust embedded in social networks. Tilly (1990) explains that migrants’ reliance on such networks for business or other information minimizes the socioeconomic hardships they would experience because they acquire jobs in ethnic enterprises and establish ethnic related businesses in ethnic enclaves (Raijman & Tienda, 2000). But some are concerned that immigrant entrepreneurs who focus on their business efforts on their co-ethnic enclaves do not integrate with the host country society and culture. Although an ethnic enclave has distinct economic advantages, Sequeir and Rasheed (2006, 367) propose “Exclusive reliance on strong ties within the immigrant enclave has a negative effect on growth outside the enclave community. Similarly, Drori, Honig and Ginsberg (2010, 20) propose “The greater the reliance of transnational entrepreneurs on ethnic (versus societal) embedded resources and network structure, the narrower their possibilities of expanding the scope of their business.” We ask what is the effect of co-ethnic and non co-ethnic networking on business performance in immigrant businesses