More or less guanxi: Trust is 60% network context, 10% individual difference

The strong ties known in China as guanxi can be distinguished by a high level of trust relatively independent of the surrounding social structure. Using network data from a stratified probability sample of 700 entrepreneurs citing 4664 contacts, we study guanxi relative to other relations to learn how much individual differences such as well-being, business differences, political participation and demographic factors matter for the guanxi distinction. Two findings stand out: First, the connection between trust and social network is robust to most differences between individuals, especially business and political differences. Trust variance is 60% network context, and 10% individual differences. Trust increases within a relationship as network closure increases around the relationship, but some relationships mature into guanxi ties within which trust is high and relatively independent of the surrounding social structure. Second, when individual differences matter, they concern social isolation. Guanxi ties are more distinct in the networks around entrepreneurs with small, marginal families, and around those with small, closed networks. Both categories of entrepreneurs are likely to experience difficulties with respect to resource access and doing business with people beyond their network, which may explain why longstanding guanxi ties linked to important events are particularly distinct for these entrepreneurs.     

TRUST,RECIPROCITY, AND RULES

Many economic interactions rely on trust and trust violations can have serious economic consequences. Simple minimum standard rules are attractive because they prevent egregious trust violations. However, they may undermine more trusting and reciprocal (trustworthy) behavior that otherwise would have occurred, leading to worse outcomes. In an experimental trust game, we test the efficacy of exogenously imposed minimum standard rules. Rules damage trust and reciprocity, reducing economic welfare. While sufficiently restrictive rules restore welfare, trust and reciprocity never return. Results indicate that participants are concerned about payoffs while also using the game to learn about trust and trustworthiness of others. (JEL C72, C90, D63, D64, L51)     

Entrepreneurial gain,cultural similarity and transnational entrepreneurship

The aim of this article is to analyse the factors affecting the motivations of immigrant entrepreneurs to generate an entrepreneurial gain (positive impact on home and host countries). We consider that positive reasons for emigrating can increase transnational entrepreneurship and mutual benefits for both societies. To test this hypothesis we present a model using Structural Equation Modelling (SEM). This model explains the relations between motivations, cultural similarities, institutions and transnational linkage potentials. We designed an ad hoc search of Argentinean entrepreneurs established in Spain, both as EU citizens and without legal EU status, using online social networks. We applied an online questionnaire to 214 such entrepreneurs. We conclude that institutional rules (formal and informal) greatly influence the location decisions of firms and immigrant entrepreneurs’ motivations for starting transnational business because they provide the frame for the development of profitable opportunities.     

Making Modernity in China: Employment and Entrepreneurship among the New Generation of Peasant Workers

China is experiencing urbanization and modernization at the largest scale in human history. An army of over 280 million “peasant workers” are an integral part of this great transformation to modernity. Drawing on different data sources, including national representative random samples and the authors' first-hand survey data, we provide systematic comparisons between the older and the younger generation of peasant workers and between young peasant entrepreneurs in cities and young returnee entrepreneurs. We found that, compared with the older generation, the younger generation of peasant workers is better educated, holds more stable jobs, has a higher income, lives a happier life and is more optimistic about the future. Our analysis of the two types of peasant entrepreneurs shows that they are the elites among peasant workers, running successful business and making handsome profits. We also note that discrimination and institutional obstacles, especially the hukou system, remain to be overcome in the peasant workers' transition to modernity.     

DOES BANKRUPTCY LAW AFFECT BUSINESS TURNOVER? EVIDENCE FROM NEW AND EXISTING BUSINESS

This study examines how differences in state bankruptcy laws, specifically the homestead exemption, affect business turnover by studying both new and existing businesses. We focus on areas just near state boundaries to control for unobserved local attributes to better isolate the effect of more wealth protection. We find that an increase in the homestead exemption attracts new businesses but also has a positive impact on existing businesses, suggesting that asset protection through bankruptcy law encourages successful entrepreneurs to incur the risks. Our results indicate that the personal bankruptcy law is an important policy tool that governments can use to encourage business growth without causing business turnover. (JEL K30, K36, R11, R1)     

Mobility and social capital among Lebanese and Beninese entrepreneurs engaged in transnational trade

This contribution focuses on importers of second-hand cars operating between Brussels, Belgium and Cotonou, Benin. Intensive multi-sited field-work reveals important differences in the way Lebanese and Beninese car importers operate in this import–export business and how they circulate between Europe and West Africa. This paper, through a comparative approach, describes and explains those differences.

A first level of explanation is linked to the fact that car importers working in Cotonou come primarily from two different communities. On the one hand, Lebanese car importers operate inside a trade diaspora, never needing to travel because they are able to rely on other Lebanese to send them second-hand cars from Brussels and to collaborate at different levels of the trade chain. On the other hand, native Beninese car importers have the status of cross-border entrepreneurs working in a territory of movement. They must themselves travel to Europe to obtain their second-hand cars, thereby maintaining a double involvement in Europe and West Africa.

A second level of explanation can be found in the evolution of the Euro-African second-hard car import–export business, a trade pioneered by Lebanese entrepreneurs. What began as a fragmented activity became formalised in business hubs, such as Brussels. This centralisation allowed the arrival of new types of car importers, like the Beninese, on the market. However, unlike the Lebanese, these newcomers could not rely on settlements of fellow-countrymen located in multiple business markets and had low levels of trust between each other. To this day, they have failed to mobilise the capital necessary to work in the same conditions as the Lebanese.

What distinguishes Lebanese and Beninese second-hand car importers? The analysis shows that it is their ability to recreate trust in a context of high uncertainty. This issue of trust has a direct impact on the way both types of importers organise their spatial mobility and operate their business activities.     

Performance and Performativity: Undoing Fictions of Women Business Owners

This article explores the representation of women small business owners in three contemporary novels; Chocolat, The Shipping News and Back When We Were Grownups. The primary contribution is to demonstrate how fiction can both challenge and collude in dominant constructions of entrepreneurship, which is more generally gendered as male and masculine. Judith Butler's thinking on performativity with regard to gender and sexual desire is applied to women's identities and extended to include their behaviour as entrepreneurs. The article demonstrates that these novels both ‘do’ and ‘undo’ gender and business ownership. They portray women who are successful in business while displaying culturally accepted norms of femininity but who are set apart from other female characters. However, their partial and conflictual identification with norms of gender and entrepreneurship could lead a reader to question those norms and through the undoing of the protagonists, the novels offer alternative performances and performativities of doing gender and of doing business.     

How citizen spouses help immigrant entrepreneurs pull up their bootstraps: The case study of married Thai immigrant entrepreneurs in Japan

The significance of citizen spouses of immigrants is often downplayed in the success of immigrant entrepreneurs in the settlement country. This study employs in-depth interviews with four Thai immigrant entrepreneurs to illustrate the immense roles of Japanese citizen spouses in helping their businesses. We argue that the assumption that immigrant entrepreneurs are “pulling themselves up by their own bootstraps” does not provide a broader view of the process to their success. The findings show examples of how Japanese citizen spouses make an enormous contribution to the venture of their Thai spouse's business by helping them overcome structural barriers as well as legal issues in Japan.     

Small Business Success Among Men- and Women-Owned Firms in Rural Areas1

Abstract Rural women have difficulty finding good jobs. Ownership of small businesses offers an alternative but the sales and income of women-owned firms are significantly lower than those of men-owned firms. Compared with men, women owners are more likely to operate smaller and newer businesses; however, these differences do not completely account for the gap in gross sales between men- and women-owned businesses. The strongest influences on business success are firm size, corporate status, and industrial sector. Though significant, the owner's gender is less important than these organizational characteristics. The factors influencing success of small businesses generally are the same for men- and women-owned businesses. More research on business networks and the start-up phase of small businesses is necessary for a better understanding of the sources of gender differences in success.     

Is What’s Good for the Business,Good for the Family: A Financial Assessment

Small business prosperity doesn’t necessarily translate into family prosperity. This study utilizes the first and second waves of the National Family Business Survey to explore the influence of changes in key business financial measures on objective and subjective measures of family success. Increases in the available cash in the business from higher gross sales or net profits brings more cash into the household, while increases in the market value of the business increases the amount of money spent on other household assets. A more subjective assessment suggests that positive changes in the business financial measures create a more positive perception of the business’ success; however, these positive changes have no influence on a more positive perception of the family’s success.     

VOLUNTARY DISCLOSURE AND EARNINGS EXPECTATIONS IN MULTI-LEVEL MARKETING

Multi-level marketing (MLM) firms recruit individuals into a business opportunity but are not required to disclose the earnings of past participants. Some MLMs voluntarily create income disclosures, which may serve both marketing and risk-management functions. We create an economic experiment to explore the impact of MLM income disclosure on consumer interest and expectations. Results suggest that disclosure does not significantly alter interest in the business opportunity but does reduce expectations, on average, when subjects are asked to estimate annual income in a lab environment. We discuss findings in the context of current regulatory policy. (JEL D18, D82, M38)     

Small Business Success in Rural Communities: Explaining the Sex Gap*

Abstract Building on previous theory and research, we propose a “structural relational” view of the sex gap in small business success. Our findings, based on analyses of data from 423 small business owners in Iowa, show support for our model and suggest that links between owners, social relational processes, business structure, and small business success operate differently depending on the industry location of the business and the owner's sex. Results also indicate that the business owner's sex has direct and indirect effects on business success. This finding suggests that social relations, organizations, and institutions are all gendered in ways that influence the sex gap in sales, but that further research is needed to more fully explain sex differences in small business success. We discuss these and other findings in terms of their theoretical and practical implications, and suggest directions for future research.     

Interpersonal trust in GermanCzech work relations: Mutual expectations and suggestions for improvement

Abstract

Issues of trust have received much attention of researchers of multiple disciplines. Growing interest can be seen on how culture and trust are interrelated and what trust means for intercultural work relations. In this study, trust and trustworthiness are analyzed between Czech and German employees and managers through a qualitative and a quantitative approach. First, we focus on the question if cultural differences exist in the process of evaluating the trustworthiness of another person (implicit trust theory), and which specific actions are (not) considered trustworthy behaviour on both sides. Second, the relevance and degree of perceived trustworthiness between Czechs and Germans within the business context is explored. Finally, suggestions by practitioners for successful trust development are described. The results show that abstract categories of trustworthiness (e.g. reliability) are similar on the German and the Czech side, but the reported signals and actions are somewhat different. Perceived trustworthiness was found to be significantly related to the satisfaction with the co-operation.     

TAX RATES,GOVERNANCE, AND THE INFORMAL ECONOMY IN HIGH‐INCOME COUNTRIES

Approximately 16.7% of output in high‐income OECD (Organisation for Economic Cooperation and Development) countries is produced informally. I present a model economy where entrepreneurs decide how much of their production to keep informal. Informality carries a risk of getting caught, taxed, and fined. Results from a model with differences in tax rates alone only agree to approximately 23% with data on informality. Taking into account both governance quality and tax rates, agreement between the model's results and data increases to 72%. A policy experiment raising governance quality in Greece, Italy, Spain, and Portugal to Finnish standards reduces informality by 13 percentage points. (JEL E26, H26, J24)     

Retail entrepreneurial values in a bicultural community: Cultural and economic contentions and negotiation

Economic activity is universal yet the objectives of entrepreneurship are culture-specific in that the entrepreneur cannot be separated from the cultural context. The purpose of this research was to understand the structural differences between the Old Order Amish and their non-Amish counterpart as they conduct entrepreneurial activity in a bi-cultural rural setting. Eleven months of field research uncovered distinct differences between the two groups with regard to three conceptual themes: responsibility, cooperation and competition, and success. Amish entrepreneurs often find themselves in a state of negotiation between contradictory values of their own cultural system and those of the dominant world. The economic behavior of non-Amish entrepreneurs, on the other hand, is steeped in notions of individual gain found in the free market system. In an increasingly multicultural world, understanding the role of culture in economic life becomes critical if cultural groups are to conduct business in the same marketplace.     

Social and human capital in immigrant adaptation:: The case of Canadian business immigrants

Purpose: With the resurgence of immigration to North America in the past three decades, research on immigrant adaptation and the attendant issues of assimilation has burgeoned. A prevailing assumption of much of this research is that social capital is a vital resource enabling immigrants to find their economic and social niches in the host society. In a word, social capital is a key factor in the immigrant adaptation process. This assumption has been especially prominent in research focusing on one specific subset of immigrants: entrepreneurs. Social capital in the form of ethnic networks and family ties is assumed to function critically in the establishment and operation of immigrant-owned businesses. This paper argues that although the formation and expenditure of social capital may typify the experiences of many or even most immigrant entrepreneurs, some enter the host society with sufficient human and/or financial capital that enables them to forego the utilization of social capital in the adaptation process.Methods: To demonstrate, I draw upon in-depth interviews conducted with 70 immigrant entrepreneurs in the province of Ontario, Canada between 1993 and 1995. All interviewees entered Canada under the auspices of the Canadian Business Immigration Program, a federal program designed to attract immigrants with demonstrable business and managerial skills that presumably will lead to the establishment of a firm and thus to the subsequent creation of jobs and economic activity. A formal requirement of their entrance, then, is the possession of proven business skills, a critical form of human capital that facilitates successful economic adaptation in the host society.Forms of social capital are described and their applicability to the adaptation experiences of the interviewees is analyzed. What is found among these business immigrants is a minimal reliance on social capital in establishing and operating their firms. In securing investment capital, finding a work force, and acquiring information, ethnic and family ties, the most common forms of social capital for immigrants generally and for immigrant entrepreneurs in particular, do not play a major role. Solidarity with co-ethnics and the use of family labor, so common among conventional immigrant entrepreneurs, are not of significant import in the economic adaptation of these business immigrants. Moreover, ties to coethnics are only minimally significant in patterns of social adaptation as well.Results: It is concluded that immigrants entering the host society with pre-migration intentions of business ownership possess sufficient human capital that enables them to disregard the formation and utilization of social capital in their economic and social adaptation. In this they differ from immigrants who take a more conventional path to business ownership, that is, laboring in the mainstream work force following entrance into the host society and gradually accumulating resources that lead to entrepreneurship.For business immigrants with children, however, social capital does play a key role in the decision to immigrate. Business immigrants are prepared to abandon successful firms in the origin society in order to provide their children with a more promising socioeconomic environment, including above all what is viewed as superior opportunities for education. Hence, the social capital that inheres in close-knit family arrangements provides incentive for parents to accept losses in financial capital in order to increase their children’s human capital.Conclusion: The context of the receiving society may also be seen as a form of social capital for Canadian business immigrants. All declare that quality of life, rather than the lure of financial success, serves as their major incentive to immigrate to Canada. Moreover, the fact that they enter a society that officially proclaims its multicultural character offers them the opportunity to become Canadian but to retain their ethnicity. The source of social capital in this case, then, is not the ethnic community, but the broader society.     

Nonagricultural micro-enterprise development among the Pennsylvania Amish: A new phenomenon

The economic character of Amish communities shows signs of considerable change. Amish traditionally have depended on farming, and until recently, nonagricultural work was cause for excommunication from the church. The traditional farming base, however, is increasingly unable to provide the jobs and income necessary for the growing population. In response, there has been a rapid growth in nonagricultural micro-enterprises. The purpose of this paper is to examine the nature of this phenomenon in the Lancaster Settlement in Pennsylvania, the largest Amish settlement in Pennsylvania, and the earliest and still second largest in North America. The paper analyzes the characteristics of the Amish entrepreneurs, their businesses and markets, with comparisons with the standard entrepreneurial literature. The Amish entrepreneurs are found to be quite similar in many ways to entrepreneurs in general, but differ considerably in other aspects. Also, they often differ from popular perception, especially the newer Amish entrepreneurs. Results indicate that the newer Amish entrepreneurs are more dynamic and outward looking than the previous generation; perhaps more in the mold of nonAmish entrepreneurs. The success of the Amish entrepreneurs holds potential lessons for general rural business development strategies.     

Feminist Insight on Gendered Work: New Directions in Research on Women and Entrepreneurship

This paper discusses research on female entrepreneurs in conjunction with feminist theory on gendered work. I explore the ways in which much of the research on women's experiences of entrepreneurship focuses on identifying similarities and differences between female and male business owners, and on providing explanations for the differences identified. While such an approach is useful in compensating for the exclusion of women in earlier studies of business ownership, it does not illuminate how and why entrepreneurship came to be defined and understood vis-à-vis the behaviour of only men. I argue that existing knowledge on women business owners could be enhanced through reflection on two issues — first, on the essentialism in the very construction of the category of ‘the female entrepreneur’ (which prioritizes sex over other dimensions of stratification) and second, on the ways in which the connections between gender, occupation and organizational structure differently affect female and male business owners.     

Breeding performance of an apex predator,the peregrine falcon,across urban and rural landscapes

Urban environments present wildlife with major challenges and yet surprising numbers of species have colonised towns and cities globally. Despite the growing realisation that urban centres can be important habitats for wildlife, why some species do better than others in urban environments remains poorly understood. Here, we compare the breeding performance of an apex predator, the peregrine falcon (Falco peregrinus), in urban and rural environments, and test whether variation in reproductive success between and within environments is driven by prey. Historical breeding data were collected from raptor study groups across Great Britain between 2006 and 2016, from 22 urban and 58 rural nest sites, involving 101 and 326 nesting attempts, respectively. Prey density, biomass and diversity around the individual nests was estimated using modelled estimates from a national bird census. Urban peregrines produced more fledglings and had a higher overall nesting success (i.e. whether a nesting attempt was successful or unsuccessful) than rural peregrines. Prey density and biomass were significantly higher, and diversity significantly lower, in the urban sites, and explained the variation in reproductive success within both the urban and rural environments. Therefore, urban environments in Great Britain appear to provide peregrine falcons with superior habitats in terms of prey availability compared to rural habitats. We conclude that some apex predators can benefit from urban environments and that urban planning has the potential to benefit biodiversity across many trophic levels.

     

What Is Different about the Profile of the Social Entrepreneur?

In recent years, the term social entrepreneur has become increasingly common in academic and business circles. Social entrepreneurs engage in a variety of activities, but always with the intention of solving social problems. Social entrepreneurs are not merely people who perform acts of charity; they have an evident desire to improve social well‐being and develop projects with long‐term vision. The creation of sustainable social value is a key characteristic that differentiates them from well‐meaning individuals who simply engage in charitable works. There are, however, significant gaps in our understanding of social entrepreneurs and few empirical studies on the subject. This present study attempts to identify the characteristics of more socially oriented entrepreneurs, using sociodemographic variables and the theory of universal values toward work. Analysis of a sample of approximately 400 people shows that more than half of entrepreneurial orientation can be explained through the possession of the values of self‐enhancement (with an inverse relationship in this case), self‐transcendence, and conservation. The theory of universal values has proved extraordinarily useful for studying the characteristics of social entrepreneurs.