Edited by Peter Nijkamp, Jacques Poot and Mediha Sahin
Chapter 4: Ethnic concentration, cultural identity and immigrant self-employment in Switzerland
Since the 1960s, sociological and economic research on the determinants of ethnic entrepreneurship has attempted to explain why immigrants in advanced economies are more likely to become self-employed than natives, and more generally, why some ethnic groups show higher self-employment rates.1 Early-stage research pointed out that structural factors like ethnic exclusion and discrimination widely contribute to explain why immigrants turn to self-employment (Bonacich, 1973; Wong, 1988). Later on, differences in education and work experience of immigrants have been emphasized. Results hold for many countries, including Australia, Canada and the United States (Reimers, 1983; Evans and Kelley, 1986; Bloom et al., 1995). However, human capital does not provide a full explanation for such remarkable differences. For instance, ecological approaches stressed the importance of factors such as ethnic and cultural diversity, as well as fluency in the host country’s language, in encouraging or displacing business ownership. The academic discussion on ethnic entrepreneurship has gained much more attention after the works of Borjas (1986) and Evans (1989), which shed light on two important results. The first is that immigrants tend to be more entrepreneurial in areas where other individuals of the same ethnic group are concentrated. Measured by Borjas as the proportion of foreigners in the total population of US metropolitan areas, the effect of ethnic enclaves on business ownership is positive, suggesting that concentration in specific geographic areas enhances opportunities for immigrants to become self-employed.
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