World Encyclopedia of Entrepreneurship
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World Encyclopedia of Entrepreneurship

Edited by Léo-Paul Dana

This comprehensive reference work, written by some of the most eminent academics in the field, contains entries on numerous aspects of entrepreneurship.
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Chapter 12: Entrepreneurship in the Ethnic Ownership Economy

Ivan H. Light


Ivan H. Light The ethnic ownership economy encompasses self-employed people, their unpaid family workers, and their co-ethnic employees. The ethnic ownership economy has three sectors: formal, informal and illegal. Access to these sectors importantly depends upon prior access to four capital resources: financial capital, social capital, human capital and cultural capital. In turn, young people obtain access to these economic resources through the class system and/or through the ethnic/religious groups to which they belong. The resources obtained influence the extent to which young people enter the formal, informal or informal sector of their group’s ethnic ownership economy. Middleman minorities are well endowed in these resources so their self-employment rates are recurrently high. Although descended from middleman minority theory, which Max Weber (1981: ch. 16C) initiated, the ethnic economy literature now more broadly addresses the economic independence of immigrants and ethnic minorities in general, not just of middleman minorities. This expansion releases the ethnic economy from narrow focus upon historical trading minorities, and opens a discussion of the entire range of immigrant and ethnic minority self-help and self-defense through business ownership. Business ownership represents a ubiquitous self-defense of immigrants and ethnic minorities, but especially of any who confront disadvantage in labor markets. Business ownership permits immigrants and ethnic minorities to reduce their employment disadvantage, renegotiating their participation in the general labor market from a position of greater strength. Unable to find work in the general labor market, or unwilling to accept the work that the general labor market offers, or just...

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