The Economic Sociology of Firms and Entrepreneurs

The way in which entrepreneurs, particularly minorities and immigrants manage to obtain the capital and labor necessary to sustain a business can be studied by considering the social structure within which individuals and groups construct firms.Ethnographic studies of Java and the Philippines indicate that trust and solidarity among entrepreneurs are integral to the formation of small enterprises.Certain patterns of group solidarity give immigrants and other minorities an advantage in the construction of new ventures. Examples of these solidarity patterns include the credit associations and social connections that have enabled overseas Chinese to establish efficient firms in Southeast Asia.While this sort of "internal coupling" (with co-ethnics) works to minorities' and immigrants' advantage, they also benefit by the "decoupling process" that results from moving away from friends and family. Although some argue that social capital hampers the expansion of minority-owned businesses, the fact is that many large industrial empires are built on social and family connections.(SAA)