The impact of mixed embeddedness on the creation and growth of Chinese ethnic entrepreneurship in Indonesia

Ethnic entrepreneurship research has suggested that entrepreneurial activity is part of Chinese heritage, and hence entrepreneurship is attributed to overseas Chinese diaspora. Furthermore, research suggests a link between Chinese ethnicity and entrepreneurial growth. Kloosterman (2010) transcends such essentialisation of ethnicity by pointing to the importance of the ‘institutional support’ as well as the ‘opportunity structures’ (‘meso environment’) for ethnic entrepreneurships to flourish. This thesis develops the ‘Chinese ethnic entrepreneurship in Indonesia’ model that identifies factors that have been fundamental driving force of the entrepreneurial success of the Chinese Indonesians. This model extends the ‘mixed embeddedness’ framework developed by Kloosterman (2010). Mixed method research has been adopted in this thesis. Survey was distributed to the Chinese ethnic entrepreneurs, their employees and family members. In total one hundred and sixty four filled in surveys were submitted by the Chinese ethnic entrepreneurs. To test the model, hypotheses were developed, SEM tests were conducted and the results were analysed. In the second phase of the research, ten qualitative interviews were conducted in order to corroborate the findings from the survey stage of the present research. Findings of this thesis indicate that ‘micro’, ‘meso’ and ‘macro’ environments all interact with each other with the support of the concept of ‘sinyong-trust’ and that there exist a number of heterogeneous factors shaping entrepreneurial creation and growth. The results of the analysis indicate that Chinese Indonesians have been able to build their strong entrepreneurial presence in Indonesia due to heterogeneous circumstances and any single factor cannot explain this. ‘Discriminatory regulations’ supported by the personality trait of ‘seeing market opportunities’ contribute to the process of ‘creating’ new businesses. In addition, ‘family support’ plays an important role during the initial stages of business life cycle. Moreover, ‘opportunity structures’ through the existence of ‘ethnic market’ and ‘wider-non ethnic market’ as well as access to ‘business ownership’ also influence the process of business ‘creation’. For some of the entrepreneurs, family support takes a form of ‘family expectations’ that direct Chinese Indonesians to the entrepreneurial field. ‘Social capital’ in a form of ‘guanxi-networking’ in its ‘bonding’ form of ‘co-ethnic’ support and ‘bridging’ form of ‘links to the government’ indeed have been found to support sales and profit growth of the Chinese entrepreneurs. In addition, ‘Confucian values’ of ‘hard work’ and ‘harmony’ also influence financial ‘growth’ of the businesses under investigation