Effects of Home Country Factors on Immigrant Entrepreneurship

By: Dr. Kumar Gurung (Ph.D.,MS.,MCEC.,LLB.)

Another recurrent theme in the literature pertains to the country-of-origin benefits as possessed by immigrant entrepreneurs. In this regard, it has been distinguished that immigrant entrepreneurs possess the capabilities necessary to access and make use of the entrepreneurial opportunities and resources of their countries of origin despite their not being able to take complete advantage of the entrepreneurial ecosystem of the host country due to blocked mobility (Grujic, 2019). By extension, immigrant entrepreneurship, being both an economic and social phenomenon, can only be best understood by investigating the perspectives of both the host country and country of origin.

When these perspectives are considered, it becomes clearer that contrary to the view that immigrant entrepreneurs reap the most benefits from their host countries, they tend to benefit from
the entrepreneurial ecosystems of both the host and home countries. These benefits vary from country to country, often depending on country-specific economic conditions and related attributes (Roundy & Fayard, 2020). Still, the co-effects of the dual entrepreneurial ecosystems often lead to higher rates of both business and entrepreneurial success within specific groups of immigrants (Lilius & Hewidy, 2019). Therefore, those responsible for the formulation of policies in general
and economic policies can harness the benefits and power of immigrant entrepreneurs to spur or increase economic activities through, among other ways, the development and deployment of
programs designed to encourage immigrants to embed in the host country and country of origin entrepreneurial ecosystems (Windzio, 2015; March-Chorda, 2021). These findings support the
popular and widely accepted view that immigrant entrepreneurship is influenced mainly by personal attributes, the entrepreneurial environment of the host country, the country-of-origin factors, and co-ethnic community characteristics (Song, 2019).

Therefore, entrepreneurship among immigrants cannot – and ought not to be – explained or accounted for using just one factor, such as the host country characteristics (especially the
entrepreneurial ecosystem of the host country). Instead, the other factors have to be considered as well. Even though the entrepreneurial environment of the host country plays one of the essential roles in influencing immigrant entrepreneurship (Roundy & Fayard, 2020), the other factors are no less significant. In an interconnected world characterized by globalization and increased (almost unrestricted) movement of human resources, home country factors are increasingly playing a pivotal role in influencing immigrant entrepreneurship. It is because immigrants are increasingly having contact – direct or indirect – with their home country and, in doing so, utilize the home country entrepreneurial ecosystem to further their entrepreneurship abroad (Pung et al., 2017)

While this practice was still possible before the advent of globalization, it has increased markedly due to the ease with which immigrants can connect with people and other resources back in their home countries without necessarily having to be physically present. This, in turn, means that even immigrants’ movements are restricted by virtue of their status as immigrants; they can still tap in and use resources from their home country to advance or support their entrepreneurship in their host countries (Brzozowski, 2016; Dutta et al., 2021).

Other than the home country factors, the other important but often overlooked or underrated factor affecting immigrant entrepreneurs is their attributes (Audretsch et al., 2019). According to Pardos & Xena (2019), every human being is unique in different respects, and this uniqueness remains
with the individual regardless of whether he/she lives and works (in the home country or abroad). Some of the most important personal attributes that influence an individual’s entrepreneurial
capabilities include levels of education, attitude towards saving and amount of savings one has, work experience, ambitions, migratory experience, language skills, legal status, and age. Others are the purpose of migration, marital status, gender, risk-taking attitude, and the length of stay in a host country (Pardos & Xena, 2019). As an example, risk-averse people are less likely to become entrepreneurs in a new country, while those who are risk-takers are not only likely to become entrepreneurs but successful entrepreneurs as well. Similarly, ambitious immigrants are more
likely to become entrepreneurs in a new country than less ambitious immigrants. Thus, combined with other factors, personal factors play an essential role in influencing the entrepreneurship of immigrants (Pardos & Xena, 2019).

The issue of regional competitiveness is vital to the success of any immigrant entrepreneur. Regional competitive advantage is of great importance in supporting overall global competitiveness; this is why any entrepreneurial ecosystem promotes competitive advantage (Acs et al., 2017). Today, different models attempt or endeavor to explain the functioning of entrepreneurial ecosystems. However, the associations and interactions between the various elements constitute an entrepreneurial ecosystem. According to network theory, there are different and unique entrepreneurial ecosystem conditions that grow in specific locations; and any given entrepreneurial ecosystem influences regional competitive advantage by way of different mechanisms such as reduction of transactional costs, productive entrepreneurship, transfer of knowledge, and innovation (Grujic, 2019; Roundy & Fayard, 2020)