The role of social capital in the growth and innovation of immigrant-founded enterprises

Abstract

Immigrant-founded enterprises contribute significantly to host country economies. Research indicates that immigrant entrepreneurs garner benefits from their social capital within co-ethnic communities. Relationship strength, community norms, and the level of community embeddedness seem to influence the potential for developing immigrant-founded businesses. Despite its start-up phase benefits, co-ethnic social capital may impose limitations on these enterprises. We offer a theoretical analysis connecting social ties, and network structure with the ability of immigrant-founded enterprises to innovate. This paper expands our understanding of immigrant-founded enterprises, and informs interested parties of the value of developing the immigrant entrepreneurs’ social capital beyond co-ethnic communities.