Scandinavian Working Papers in Economics

Ratio Working Papers,
The Ratio Institute

No 274: Why Family Matters: The Impact of Family Resources on Immigrant Entrepreneurs’ Exit from Entrepreneurship

Miriam Bird () and Karl Wennberg ()
Additional contact information
Miriam Bird: Center for Family Business, University of St. Gallen, Postal: University of St. Gallen, Center for Family Business, Dufourstrasse 40a , 9000 St. Gallen, Switzerland,
Karl Wennberg: Stockholm School of Economics, Institute of Analytical Sociology (IAS) and the Ratio Institute, Postal: The Ratio Institute, P.O. Box 5095, SE-102 42 Stockholm, Sweden, Stockholm School of Economics, PO Box 6501, 11383 Stockholm, Sweden, Institute of Analytical Sociology (IAS), Linköping University, Sweden

Abstract: We integrate insights from the social embeddedness perspective with research on immigrant entrepreneurship to theorize on how family resources influence exit from entrepreneurship among previously unemployed immigrant entrepreneurs. Results from a cohort study of immigrant entrepreneurs in Sweden reveal that family resources are important for immigrants to integrate economically into a country. We find that having family members in geographical proximity increases immigrant entrepreneurs’ likelihood of remaining in entrepreneurship. Further, family financial capital enhances immigrant entrepreneurs’ likelihood of remaining in entrepreneurship as well as their likelihood of exiting to paid employment. Although often neglected in immigrant entrepreneurship studies, resources accruing from spousal relationships with natives influence entrepreneurs’ exit behavior. We discuss contributions for research on entrepreneurial exit, entrepreneurs’ social embeddedness, and immigrant entrepreneurship.

Keywords: Immigrant entrepreneurship; entrepreneurial exit; family resources; social embeddedness; relational embeddedness

JEL-codes: J60; L26

49 pages, September 26, 2016

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