I would like to thank my Professors at Hannam University to help me find the

 
 

---

7 
Chapter 2: Literature Review 
2.1 Overview 
This section will be structured as follows: Firstly, migrants, immigrant 
entrepreneurs, start-ups, and characteristics of immigrant entrepreneurs will 
be explained under the light of definitions by previously conducted 
researches in the field of immigrant entrepreneurship. Secondly, difference 
between necessity and opportunity entrepreneurs will be explained, the 
factors influencing the success of immigrant entrepreneurship will be 
elaborated such as ethnic market niche, ethnic social network, start-up 
capital, emergency loan, education, previous experience, risk aversion, 
commitment, institutional support listed in Figure 1 of section 3 
(Methodology) under the heading of 
“
model of survival factors of necessity 
immigrant entrepreneurship
”
. 
2.2 Overview of Start-ups 
Salamzadeh and Kawamorita Kesim (2015) has studied phenomenon of start-
ups in their research and they defined them as companies who strive for 
their existence. Furthermore, they added that start-ups are newly born 
companies based on wonderful ideas and aiming to be successful. It is like an 
expedition from beginning till completion (Evers, 2003), it
’
s establishment 
(Vesper, 1990), micro-management (Hansen and Wortman 1989), preliminary 
steps before launching (Hansen & Wortman, 1989), incubation (P. Reynolds 
& Miller, 1992), entrance to the market (Lumpkin & Dess, 1996) etc., are the 
terms used often in many researches for describing the process of an initial 
stages of a venture or an organization. (Avnimelech & Teubal, 2006) 
consider start-ups as technology based companies which are dedicated to 
support a new idea until it reaches a certain level of productivity and sales. 

---

8 
On the other hand (Staber, 2005) argues that start-ups are not only 
innovation centered instead they create new niches and segment in the 
markets to serve a distinguished need or generate a need using marketing 
strategies. 
Salamzadeh and Kawamorita Kesim (2017) points out the struggle of 
entrepreneurs in the beginning of the business because budget is always a 
critical aspect to initiate a start-up that turns into commercial business in the 
later stages. Carlsson and Mudambi (2003) agrees that finding an adequate 
amount of financial support is always crucial to the growth of immigrant 
entrepreneurial businesses.
2.3 Immigrant Entrepreneurs 
For this study we will use the definition of immigrant entrepreneurs by Sasse 
and Thielemann (2005) immigrants are people who have been living outside 
their home country for more than 12 months or longer. These people leave 
their country of origin due to 3 possible factors: economic challenges at 
home country, forced migration or family migration. Furthermore, (R. R. S. 
Chaganti, Watts, Chaganti, & Zimmerman-Treichel, 2008) stated that 
Immigrant entrepreneurs are individuals who start a business in their host 
country to overcome the economic challenges. They get connected with 
either former migrants or non-migrants with common goals, in order to live 
through the obstacles that come their way in the host country.
The concept of immigrant entrepreneurship evolved and emerged into 
a heterogeneous idea due to globalization which further constitutes the 
category of immigrant entrepreneurs who are motivated to own their 
businesses in the host country in order to exploit the available opportunities 
and earn money (Dossani & Kenney, 2007). (Baycan-Levent & Nijkamp, 
2009) advocate the idea of immigrant entrepreneurship in their study and 

---

9 
highlights the benefits of the migrant entrepreneurship which has not only 
boosted economic opportunities for the ethnic labor but also has resolved 
labor market imbalances. Fairlie and Meyer (1996) has observed that 
immigrants are highly inclined towards entrepreneurship as compared to the 
locals. This phenomenon is explained by the risk taking factor that migrants 
have to take into account while investing money to move to their host 
country (De Haas, 2010). 
2.4 Necessity vs Opportunity Based Entrepreneurs 
The classification that can be seen in the field of entrepreneurship is 
necessity and opportunity immigrant entrepreneurs (P. D. Reynolds, Hay, & 
Camp, 1999). Necessity immigrant entrepreneurship has limited opportunities 
and it usually takes place in a difficult environment. In contrary to that 
opportunity immigrant entrepreneurship happens in the presence of an 
attractive business opportunity. 
The previous literature (Carlsson & Mudambi, 2003; Collins, 2000; 
Kloosterman & Rath, 2003; I. H. Light & Paden, 1973; Waldinger et al., 1990) 
have defined the aspirations of starting a business among entrepreneurs as 
push for necessity based and pull for opportunity based entrepreneurs. Push 
factors are used to describe the entrepreneurs who are compelled to opt for 
entrepreneurship due to several reasons such as unemployment (Masurel, 
Nijkamp, Tastan, & Vindigni, 2002), lack of education(Mata & Pendakur, 
1999), lack of skills (Kloosterman & Rath, 2003), discrimination and societal 
exclusion. In contrast, (Freitas, 1991) pull factors motivate entrepreneurs to 
pursue self-employment by choice for greater benefits. First generation 
immigrants are more likely to face these obstacles than second generation 
immigrants. Pull factors are usually based motivations such as self-

---

10 
fulfillment, monetary benefits, excitement for challenges and self-recognition 
or growth (Kuratko, Hornsby, & Naffziger, 1997; Langan
‐
Fox & Roth, 1995). 
The terms 
“
push
”
and 
“
pull
”
are based on the idea of distinguishing 
entrepreneurial motives among entrepreneurs and these terms were coined 
by (Shapero & Sokol, 1982) and by (Amit & Muller, 1995) which describes 
push as necessity and pull as opportunity based entrepreneurship. In the 
situation of opportunity entrepreneurship businesses are started usually 
when entrepreneurs have enough financial capital while on the other hand 
necessity based entrepreneurship is entirely based on the arising demand of 
a certain product (Kodithuwakku, 1997).
2.5 Characteristics of Necessity Immigrant Entrepreneurs
 
Necessity Immigrant entrepreneurs fall under the category of people who 
deal with unfavorable factors that 
‘
push
’
them into entrepreneurship. They 
initiate entrepreneurial activities due to the challenges that prevent their 
entry to the job market of their host country i.e. discernment in labor market, 
unemployment, and incompetence to find work (Kosha, Kalitanyi et al. 2015). 
Immigrants who fly from other countries usually face hardships and most of 
them belong to developing countries but due to immigration laws they have 
to match up a certain criterion to make it to their host countries. For example, 
countries like USA have Immigrations laws that let the educated people with 
a certain skillset to enter the country which makes it obvious that even 
though most of them are necessity based entrepreneurs but they are not 
poor or surplus populations (Massey, 1999; Rumbaut, 1995).
Min and Bozorgmehr (2003) confirm in their study about the impact of 
abolishing origins quota from immigration act in USA in 1965 which made it 
possible for immigrants from Middle East, Africa, Asia, Latin America and 
Caribbean Islands to make their way to the States . Min and Bozorgmehr 

---

11 
(2003) further elaborated the characteristics of these immigrants who don
’
t 
have enough prior professional experience and their education is not enough 
as well that can reap them any benefit in terms of starting a new business on 
a foreign land they migrate to. Carlsson and Mudambi (2003) stated in their 
study that the crucial element for entrepreneurs is to find right financial 
support to work on their ideas. For instance, (Bates, 1997) in the US many 
Korean and Chinese immigrants rely on loans from their friends and families 
to start businesses. If they couldn
’
t get loan funds from friends they turn to 
rotating ethnic credit associations, and other secondary debt sources. 
Furthermore, necessity driven entrepreneurs rely a lot on their community in 
terms of overcoming challenges such as regulations imposed by government 
to protect employees (Bonacich & Modell, 1980; Min & Bozorgmehr, 2003).
Immigrants entrepreneurs get support from 
“
co-ethnic employees
”
who usually show solidarity unlike local employees. The co-ethnic 
employees get a benefit of securing a job which is very difficult to acquire in 
a mainstream job market. Many of the necessity based immigrant 
entrepreneurs hire their family members (Auster & Aldrich, 1984; Min & 
Bozorgmehr, 2003) and they target ethnic market niche. They usually offer 
traditional products which is bought by ethnic community. Mostly, immigrant 
entrepreneurs are middle aged men (Collins, 2002) who have endogamous 
marriages (Shaw, 2001) and they are supported by their spouses to run the 
business.
2.6 Ethno-cultural factors 
2.6.1 Defining Ethnic Group and Ethnic Enterprise 
Iyer and Shapiro (1999) defined ethnic group, as a group of people who 
belong to same country of origin and share similar cultural norms or 
activities. As (Waldinger et al., 1990) pointed out, an ethnic enterprise 

---

12 
usually has regular interaction with the people who share similar migratory 
experiences and national background.
2.6.2 Ethnic Market Niche 
Sequeira and Rasheed (2006) referred ethnic market niche as the market in 
which mainstream entrepreneurs are less likely to take any interest due to 
the scarce opportunities of growth and profit structure of the host country. 
The reasons behind lack of interest of local entrepreneurs can be also be 
inadequate economic incentives and limited abilities. 
Market niche has mainly two type: the ethnic market niche which is 
elaborated in this section and the other one is non-ethnic market niche. 
(Evans, 1989) stated that immigrant entrepreneurs create ethnic market 
niche by focusing on a specific ethnic product which is sought by co-ethnic 
consumers. Those ethnic products include ethnic food, ethnic newspaper and 
ethnic clothes such as Sarees.
Min and Bozorgmehr (2003) believed that immigrant entrepreneurs 
take competitive advantages and this is the reason that ethnic market is 
considered as one of the significant factors for the survival of necessity 
immigrant entrepreneurs. It is nearly impossible for native entrepreneur to 
acquire or imitate critical skills that immigrant entrepreneur has. Immigrant 
entrepreneurs offer ethnic products and they can also easily maintain a 
profitable social network with their co-ethnic consumers due to the same 
cultural background and language they share. They also attain ethnic 
solidarity from their ethnic community by showing numerous social actions 
that benefit them in maintaining their specific ethnic share.
The size of ethnic market share determines the success of business 
by necessity based immigrant entrepreneurs. In a situation where ethnic 
market share is not big enough to cover operational costs of the business, 
immigrant entrepreneur
’
s critical ethnic expertise become impractical and 

---

13 
useless. The ethnic community determines the size ethnic market share so in 
other words the larger the ethnic community the greater would be the ethnic 
market share of an immigrant entrepreneur. The relationship between ethnic 
community and ethnic market share can be found in the literature. In her 
research, (Zhou, 2004) confirmed that the size of ethnic population has an 
impact on the success of ethnic businesses. She noted that ethnic 
entrepreneurs tend to more successful in the niches where the density of 
co-ethnic labors is greater in number. (Shinnar & Young, 2008) also agreed 
that having ethnic community let immigrant entrepreneurs serve their 
services and products while expanding the business with the help of 
enthusiastic ethnic labor pool.
This section focuses on ethnic market niche but non-ethnic market 
niche cannot be overlooked while studying the survival elements of necessity 
immigrant entrepreneurship. The non-market niche doesn
’
t require ethnic 
community or any particular product rather these are the niches which are 
disregarded by local entrepreneurs due to inefficient return on investments 
and numerous prerequisites required for them. These non-ethnic markets 
attract immigrant entrepreneurs due to push factors as described by (Fairlie 
& Meyer, 1996), opting for self-employment as last resort, prompted by 
being excluded from the job market. Therefore, there are still certain non-
ethnic market niches which are controlled by immigrant entrepreneurs. For 
instance, (Office, 2003) in UK there are 100,000 ethnic minority owned 
businesses and they have hired almost 800,000 employees in total. (Min, 
2006) stated that in America millions of Chinese restaurants have also taken 
over the food industry while on other hand (Sheth, 1995) we can see Indian 
ruling the taxi businesses.

---

14 
2.6.3 Ethnic Social Network
Walker, MacBride, and Vachon (1977) in their research on "Social support 
networks and the crisis of bereavement." have called social networks an 
individual
’
s personal contacts the help a person to get emotional support, 
materialistic services/ assistance by maintaining his social identity. The 
ethnic social network is also one of the important factors of immigrant 
entrepreneurship that has been a subject of many studies and many 
definitions has been proposed for it. In this study, (Sequeira & Rasheed, 
2006) the term ethnic social network refers to formal or in other words 
professional connections and informal network includes personal connections. 
The informal social network which involves friends, family, acquaintances 
who deliver information about support and opportunity prospects. (Coleman, 
1988) agreed that social network helps entrepreneurs to achieve goals which 
are not possible to accomplish alone. The ethnic social network is comprised 
of three important factors as explained by (Walker et al., 1977): the size of 
the social network, the composition (what network is made of i.e. 
friends/family) and the frequency of communication between the network 
members. The interconnection between the members of ethnic network is 
crucial for immigrant entrepreneurs. In order to start their firms, 
entrepreneurs depend upon the common resources they can mobilize from 
their social network which is reliant on the structure of the network (Salaff, 
Greve, & Wong, 2006). 
Portes and Sensenbrenner (1993) emphasized that ties between 
people create a network and at the same time, people can share more than 
one role with each other such as friendship, kinship and economic which 
forms multiplex networks. An ethnic network which is multiplex in nature is 
better for immigrant entrepreneurs, than an ethnic network that has 
structural holes. Raider & Burt (1996) advocate the notion of structural hole 
theory which is based on the concept, that bridging structural holes provide 

---

15 
access to numerous opportunities which are beneficial for entrepreneurs. 
Raider and Burt (1996) elaborated that structural holes can be used as an 
opportunity to break information flow between people from different ends of 
the holes and bring them together. (Zhou, Bankston III, and Kim (2001) 
argued that despite the benefits of structural holes it requires a lot of time 
and effort to maintain an effective social network.
Social environment of host country also shapes the establishment of 
ethnic social network. In keeping with this idea, (Ndoen, 2000) stated that 
hostility in a host country can lead towards inability of finding business 
opportunities and diminish the entrepreneurial spirit among immigrants. 
(Portes, 1998) also approved in his research that the hostile environment in 
host country can crumble ethnic minorities and leads to greater cohesion 
between them.
Sequeira and Rasheed, (2006) examined that immigrant entrepreneurs 
can be benefitted by having strong ties to ethnic enclave. Researchers such 
as (Aldrich & Waldinger, 1990; Zimmer, 1986) also emphasized the 
advantage of personal networks that can help immigrant entrepreneurs 
discover about opportunities, specified expertise, assess ideas and access 
financial support resources. (Ram, 1994) highlighted competitive advantage 
as an element that can lead towards the success of immigrant businesses. 
Immigrant entrepreneur
’
s reliance on family members and kinship provides 
advantages but ethnic minority business owners also depend profoundly on 
(Fadahunsi, Smallbone, & Supri, 2000) co-ethnic customers, co-ethnic 
financial sources, co-ethnic suppliers and providers. The evidence can be 
seen in the study conducted by (Raijman & Tienda, 2003) on 
“
Ethnic 
foundations of economic transactions: Mexican and Korean immigrant 
entrepreneurs in Chicago
”
. It was observed that Koreans and Mexican 
entrepreneurs in Chicago prefer to hire co-ethnic suppliers because of lower 
prices, better credit terms and emotional support in days when the cash flow 

---

16 
is tight. Since ethnic emotional support and ethnic labor is critically important 
for immigrant entrepreneurs so we will discuss them in the following 
sections:
2.6.4 Ethnic Labor
Previous immigrant entrepreneur literature (Altinay, 2010; Evans, 1989; 
Waldinger et al., 1990) has recognized significance of ethnic labor for 
minority business owners. (Waldinger et al., 1990) believed that immigrant 
entrepreneurs have competitive advantage by having access to ethnic labor 
in their ethnic community and social network. Those people who are new 
comers in the ethnic community often struggle with a lot of challenges, which 
includes language barriers and insufficient job opportunities. This situation 
makes a favorable labor for immigrant entrepreneur to take advantage from. 
Similarly, Altinay and Altinay (2006) pointed out the benefits of 
hiring co-ethnic labors in their research. Business costs can be cut down by 
hiring co-ethnic workers and entrepreneurs can offer low pay rolls as 
compared to local employers. Waldinger et al., (1990) unveiled the strategies 
which are often used by immigrant entrepreneurs to sustain their businesses. 
They hire co-ethnic workers who are either underpaid, unpaid or flexible 
enough to compromise over long working hours unlike local employees. Co-
ethnic workers take such jobs to survive in the host country and they 
consider it a favor from their fellow ethnic entrepreneur to offer help in that 
time of dire need to endure obstacles (Waldinger et al., 1990). One of the 
other advantages of co-ethnic employees is their mastery of traditional 
language. Since necessity immigrant entrepreneurs target ethnic market 
niche, composed of co-ethnic workers and co-ethnic consumers creates a 
satisfying relationship with ethnic market niche.

---

17 
2.6.5 Ethnic Emotional Support 
As we see previous literature (Walker et al., 1977) have indicated social 
network into 2 types: kin-centered which is often comprised of family/ 
friends and materialistic network which includes supplier/ business related 
information providers. In other words, social networks provide materialistic 
and emotional support to immigrant entrepreneurs, which is necessary for 
their survival. For instance, (Soydas & Aleti, 2015) research on first and 
second generation Turkish immigrant entrepreneurs is evidential to the 
emotional and materialistic support family members offered to second 
generation Turkish-Australian entrepreneurs. When it comes to the 
definition of emotional support, in this study (McLanahan, Wedemeyer, & 
Adelberg, 1981), emotional support means a set of resources that work as a 
shield to obstruct the negative effects of stressful circumstances. Emotional 
support is important for immigrant entrepreneurs because of migration that 
brings along some cultural challenges and at often times leave them feeling 
hostile as well. Critical uncertainties make emotional support helpful for 
immigrant entrepreneurs.
Apart from family and friends, emotional support is often offered by 
ethnic confessional groups. For instance, (Martes, 2000) Brazilian 
entrepreneurs got a greater help from church to set up a successful cleaning 
industry in Massachusetts. A study by (Min, 1992) also found that Korean 
immigrant entrepreneurs were provided support centers by their community 
churches. 
2.7 Financial Factors 
When survival of small and medium size entrepreneurs is discussed, financial 
constraints cannot be overlooked. Similarly, Smit and Watkins (2012) agreed 
that financial constraints had been widely discussed topic in previous 

---

18 
literature because inaccessibility to adequate finances is one of the crucial 
external restraint. For immigrant entrepreneurs, formal financial system 
doesn
’
t allow them to get any loans because of various reasons. One of the 
reasons is the inability of offering a distinctive product, which makes it less 
convincing for the financial institutions to offer support. Then there are 
certain operational costs of the business such as accountant and lawyers fee. 
If immigrant entrepreneurs are unable to cover the operational costs, they 
can easily go bankrupt. The insufficient working capital makes it critical for 
immigrant entrepreneurs to survive the harsh business atmosphere at the 
host country. (Dana, 2007) summarized the hindrances to the performance of 
immigrant businesspersons which includes deficiency of investment, 
unnecessary compliance expenses, excessive procedures, discrimination and 
excessive taxes. In a nutshell, financial resources are essential for the 
survival of necessity immigrant entrepreneurs and for this purpose two 
important factors play integral role: first is Start-up capital and second is 
informal emergency loans. 
2.7.1 Start-up Capital 
Start-up capital is also considered as one of the imperative factors that can 
prevent immigrant entrepreneur
’
s business from failing. As Huang and Liu 
(2019) described in their research, ordinarily the main sources of start-up 
capital are personal and family savings/ assets, bank loans, credit cards and 
home equity loans. (Bates, 1994) believe that the survival or profitability of 
immigrants entrepreneur
’
s business can be determined by start-up capital. 
(Bates, 1997) noticed that Vietnamese entrepreneurs take small loans from 
friends and family. They start small businesses but their failure rate is very 
high. Although such findings prove that entrepreneurs should rely on formal 
institutions for financial assistance but this conclusion doesn
’
t seem to work 
for necessity based immigrant entrepreneurs. The previous literature has 

---

19 
shown that unlike mainstream entrepreneurs, immigrant business owners are 
typically not eligible for financial loans from formal institutions. Being an 
ethnic minority and due to ethno-racial discrimination, their financial 
struggles become more complex (I. H. Light & Paden, 1973)
. They are 
unfortunate and their insufficient credit history makes it impossible to 
find rich sponsors who can promise loans. In order to fulfil their financial 
needs, they have no other way except relying on their ethnic social network. 
Similarly, (Bates, 1997; Collins, 2000; Pearce, 2005; Smallbone, Ram, 
Deakins, & Aldock, 2003) agree that due to difficulty of getting bank loans 
immigrant entrepreneurs are more likely to go after friends and family for 
financial capital unlike non-immigrant entrepreneurs. (Menzies, Brenner, & 
Filion, 2003; Menzies & Hunter, 2000; Toussaint-Comeau, 2005) indicate 
that this is the reason, immigrant entrepreneurs are more inclined to build 
their ethnic social network and it is important for them to participate in non-
business activities with co-ethnic community members as well, to keep the 
social network growing.
When it comes to funding sources for the businesses of immigrant 
entrepreneur
’
s businesses previous literature (Bates, 1997; Collins, 2000; 
Yoo, 2014; Yoon, 1995) indicate that Rotating Credit Association (RCA) play 
a huge role. It has observed that mostly immigrant entrepreneurs from West 
Africa and Asia reach out to get funding from them. In the association, each 
member contributes a fixed amount of money, which is then shared among 
the members. (I. Light, Kwuon, and Zhong (1990) has described rotating 
credit associations as informal resources and informal banks. Immigrant 
entrepreneurs are required to earn a level of trustworthiness and enhance 
the quality of ties within ethnic social network to take advantage of the 
aforementioned financial resources. For necessity immigrant entrepreneurs, 
getting funding within their ethnic social network is advantageous in various 
ways. It doesn
’
t require a burdensome paperwork and complicated processes. 

---

20 
They can also take advantage of low interest rate and emotional support 
when the cash flow is low instead of getting fined for not returning the loan 
instalment on time. Altinay and Altinay (2006) found that the growth of 
immigrant business is positively dependent on economical funding from 
extended family. 
2.7.2 Emergency Loans 
The second important factor for necessity immigrant entrepreneurs is 
Emergency loans. As stated by (Chrysostome & Arcand, 2009), liquidity 
crisis can be overcome by immigrant entrepreneurs through backup non-
tradition financial resources. Rotating Credit Associations and loans by 
family/friends still remain the informal sources of financial capital for 
necessity immigrant entrepreneurs. Necessity immigrant entrepreneurs can 
also consider formal institutes if they offer programs such as government 
initiatives to support immigrant businesses. 
2.8 Managerial Factors 
Professional experience and education are two critical managerial factors for 
the survival of necessity immigrant entrepreneurs 
2.8.1 Education Level 
Education level has considered important for necessity immigrant business 
owners as described by (Chrysostome & Arcand, 2009) that education level 
enables entrepreneur to overcome the challenges faced at host country in a 
best possible way. It equips entrepreneur with knowledge to take good 
decisions for his/her business. The role of education cannot be overlooked in 
the survival of necessity immigrant entrepreneurs and it has been found in 

---

21 
previous literature such as (Bates, 1990) indicated a positive relationship 
between education level of entrepreneur and growth of small businesses. 
The evidence can be seen in a research by (Fairlie & Robb, 2007) where the 
gap between white entrepreneurs and Asians was defined on the basis of 
education.
Also (Christopher, 1998) found that lack of education among black minority 
in the US is adding to the struggle their businesses growth. The previous 
literature is comprised of studies such as (Sequeira & Rasheed, 2006) also 
confirmed the positive relationship between survival of immigrant businesses 
and education level. Immigrant entrepreneurs from a certain ethnicity tend to 
have higher educational level than others such as Taiwanese, Iranian and 
Indian communities have college degrees and many have master
’
s degrees. 
They acquire those degrees back in their home countries but still they have 
an positive impact on their businesses and decision making (Min & 
Bozorgmehr, 2000). This is the reason of higher level of survival among 
these communities than others.
2.8.2 Previous Experiences
There are two types experiences which are considered significant to the 
survival of immigrant entrepreneurs: employment experience and previous 
business ownership experience. (Boden Jr & Nucci, 2000; Br
ü
derl, 
Preisend
ö
rfer, and Ziegler (1992) found that the initial size of the business 
and survival of the venture is positively associated with entrepreneur
’
s 
previous employment experience. When it comes to the unparalleled value of 
previous business ownership experience (Vinogradov & Isaksen, 2008), 
agreed that it is integral to the higher tendency of survival of the newly 
created ventures. There are several steps that has to be taken to start a 
business which includes preliminary operational tasks, crucial stakeholders, 
thoughtful distribution of human capital, market challenges and ensuring 
flawless communication. This is the reason that aforementioned steps let the 

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22 
business owner go through the same process easier than the first time with 
greater odds of survival (Shepherd, Douglas, & Shanley, 2000). Positive and 
negative experiences, both contribute towards the learning but business 
owners should learn from their previous failures in order to do better in the 
future. The necessity immigrant entrepreneurs with prior business ownership 
experiences do their best to avoid the mistakes that caused previous failure. 
(Chrysostome & Arcand, 2009). 
2.9 Psycho-Behavioral Factors 
2.9.1 Risk Aversion 
Risk aversion and its impact entrepreneurial activities has been a subject of 
discussion in literature since long time such as studies by (Knight, 1921) and 
(Opie, 1934) are an evidence of that. The entrepreneurial behavior is often 
associated with risk taking measures (Barringer & Bluedorn, 1999; Lumpkin 
& Dess, 1996; Sathe, 1988; Zahra, 1993) which involves actions that has 
undefined consequence but with possibly high returns. The previous 
management studies have demonstrated that relevance between the venture 
manager
’
s strategic orientations and risk behaviors. A recent study by 
(Sauner
‐
Leroy, 2004) found a negative relationship between productive 
investment and risk aversion. Also Berger and Gabriel (1991) in their study 
on native Americans and immigrant, they realized if the risk aversion is 
higher it leads lower earning. In other words, risk aversion is an obstruction 
to entrepreneurship and specifically for immigrant entrepreneurs due to their 
extraordinary circumstances (Kan & Tsai, 2006; Van Praag & Cramer, 2001).
Furthermore, a study by Schneider and Lopes (1986) advocate the 
concept that high risk immigrant entrepreneurs miscalculate the possibility of 
loss by unforeseen results of strategic choices while on the other hand 
immigrant entrepreneurs with low risk aversion usually misjudge the 

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23 
likelihood of gains. This leads to the conclusion that immigrant entrepreneurs 
with higher risk aversion have higher tendency of failure and those with 
lower risk aversion have lower inclination towards the failure. Chrysostome 
and Arcand (2009) encourage the risk taking among entrepreneurs in order 
to reach out to every possible business opportunity that can be exploited. 
Consequently, low risk aversion is critical for the survival of necessity 
immigrant entrepreneurs.
2.9.2 Commitment 
Commitment which is often referred as dedication as well which means 
putting sincere efforts on the part of organization (Ingersoll, Kirsch, Merk, & 
Lightfoot, 2000). As further elaborated by (Bhide, 1994) the difference 
between success and failure of entrepreneurs is dependent on dedication 
which is derived from determination and belief among them which leads to 
(Sarasvathy, 2001) the creation of most impactful and fruitful opportunities. 
As per Allen and Meyer (1990) commitments are mainly of three types: the 
affective commitments which means having compassion and emotional 
bonding with the organization, the continuance commitment is based on the 
realization of consequential costs for leaving the organization and normative 
commitment denotes the moral responsibility to stay with the organization. In 
this study, affective commitment will be considered. 
Wu, Chiag, Wu, and Tu (2004) state that affective commitment refers 
to the sense of attachment and a feeling of belonging to the organization . As 
explained by (Mottaz, 1988), affective commitment is the type of obligation 
which is related to identification of an individual, this commitment let 
employees more likely to get attached to organizations in favorable working 
environment. Similarly, Gupta, Agarwal, and Khatri (2016) found a positive 
relationship between employee
’
s positive behavior and affective commitment.

---

24 
(Chan, 2006) agree that when it comes to immigrant entrepreneurship, 
commitment ensures the continuous existence of the business despite the 
challenging circumstances. In the immigrant entrepreneurship scenario, 
(Adendorff & Halkias, 2014) has defined commitment as to the degree the 
immigrant entrepreneur along with family members put value in the business 
and its future. 
Mowday, Steers, and Porter (1979) focused that commitment leads to 
behavior that generates results exceeding the normative expectations. For 
immigrant entrepreneurs, they face many constraints in terms of job market 
and other opportunities so they strive harder to achieve their dreams through 
entrepreneurial activities. Their failure can lead to various psycho-social 
consequences but despite knowing that they continue to push forward and 
make many sacrifices to overcome the challenges. The term sacrifice means 
underpaid efforts, lack of time for family and friends, enthusiasm to continue 
demanding work and long working hours. Commitment can also be linked to 
family business mainly if they were exposed to family business 
(Chrysostome & Arcand, 2009). 
2.10 Institutional Factors 
Institutional factors can have a greater impact on immigrant entrepreneurs 
and entrepreneurship environment in general. Economic decisions are highly 
dependent the environment of institutions as admitted by (Gwartney, 
Holcombe, & Lawson, 2006) that institutional environment influence 
entrepreneurial decisions in terms of allocating resources. (North, 1990) 
insisted that institutions define the 
“
rules of the game
”
that has an impact 
over entrepreneurial activities and decisions. These rules are determined by 
political, social and economic factors. It has been observed that favorable 
economic conditions can lead to economic freedom and they can also 
encourage entrepreneurs to create service/ product that contributes towards 

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25 
the economic growth. As (Minniti, 2008) pointed out that governments 
institutions play a crucial role in encouraging and discouraging 
entrepreneurial activities. 
Gohmann, Hobbs, and McCrickard (2008) advocate the influence of 
institutions over transaction and production costs. Institutional settings which 
are favorable to the economic progress are advantageous result in growth of 
physical and human capital investments. In order to support immigrant 
entrepreneurs, governments of various countries have started a wide variety 
of programs to encourage immigrant entrepreneurial activities Chrysostome 
and Arcand (2009). (Minniti, 2008) has divided the programs into three major 
categories: counselling programs, tax incentives system and credit 
assistance programs. Counselling programs are effective in preparing the 
entrepreneur to overcome business challenges in future. They include 
outlook of an organization, business development, operational challenges 
(Chrisman, 1989),expansion of business networks (Hansen & Wortman, 1989) 
and training regarding business environment. Chrisman and McMullan (2000) 
that although entrepreneurs with prior experience get competitive advantage 
but still knowledge is valuable about knowing how to overcome weaknesses 
and no one but a right knowledge advisor/ program can help. Chrisman, 
McMullan, and Hall (2005) agree that those entrepreneurs who seek out for 
counselling at the preliminary stages adds a substantial impact and difference 
on such businesses. 
Similarly, Kirk and Belovics (2006) emphasized the benefit of tax 
incentives by government that attract investors because it promotes 
investment and entrepreneurial activities as well. Immigrant entrepreneurs 
already struggle with financial resources but tax incentives can lessen the 
burden and compensate the expenses for business but the tax incentive 
system should modified to tailor the needs of necessity immigrant 
entrepreneurs (Chrysostome & Arcand, 2009). Similarly, credit assistance, 

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26 
microfinance and venture capital doesn
’
t seem to adapt to the special 
circumstances of necessity immigrant entrepreneurs (Minniti, 2008). 
2.11 Immigrant Entrepreneurship and Korea 
In a study conducted by (Lee 2012), it has been postulated that doing a 
business in Korea can be difficult for immigrants and foreign companies 
because of the difference in cultural values. Korea has a unique set of 
cultural practices which are very important to understand to meet the 
expectations, and desired behaviors acceptable in Korean society. It is one 
of the countries, which are constituted against its deep-rooted societal 
practices fairly different than those found in western or other 
internationalized countries. The more immigrants would be able to figure out 
and understand the differences the more benefits they can reap from Korean 
market. Moreover, there have been reports stating that immigrants are 
usually considered as highly entrepreneurial, this is the reason that 
immigration policies in developed countries reflect their interests in 
innovative immigrants. Many countries offer special programs and visas to 
get immigrants with ground-breaking ideas in order to accelerate the 
economies (Fairlie & Lofstrom, 2015). 
2.11.1 Start-up Ecosystem and Korea 
(Kim, 2015) defined start-up ecosystem as the atmosphere created by 
people and various organizations either physical or virtual to support 
businesses to help create new companies. Korea is following the start-up 
ecosystem in Silicon Valley and Tal Aviv which are top cities when it comes 
to global ranking of start-ups in terms of start-up productivity, capital 
funding, company presentation, aptitude, support set-up, entrepreneurial 
attitude, innovative tendencies and ecosystem diversity.
 

---

27 
2.11.2 Korean Accelerator Program 
To support the immigrant start-ups Korean government has introduced 
various accelerator programs which are either publicly or privately funded. 
These programs are cohort-based and they include extensive training along 
with market knowledge for the entrepreneurs who are selected to move to 
Korea for the launching of their business ideas. These programs include 
FuturePlay and SparksLab which are accelerator programs, the former is 
tech-centric and the later one is supporting companies built in USA and 
Korea by offering 3 months
’
accelerator programs (Kim, 2015). 
‘
Korean Start-up accelerator
’
also known as K-start-up has been introduced 
in the Korean entrepreneurial ecosystem since 2010 which supports the 
immigrant start-ups by providing financial support, knowledge based training 
and seed money for new business initiatives by foreigners (Seo, Hwangbo, & 
Ha, 2014). 
The necessity immigrant entrepreneur survival factors elaborated in this 
section under the light of previous literature will be used to form 
propositions in the next section which is methodology chapter. The concepts 
defined under the light of previous literature will be further used as 
foundations to formulate propositions and strategies for data collection in 
section 3 (methodology). 

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28 
Chapter 3: Methodology 
The previous chapter has laid a foundation for research propositions which 
will further form the strategies and techniques to investigate the research 
area in this chapter. The survival factors have already been discussed in 
detail in the light of existing literature and Chapter 2 has provided definitions 
to formulate a specific direction in which each survival factor will be 
investigated. The aim of this chapter is to define methodological outline of 
the study along with the techniques that will be used for data collection and 
analysis. 
3.1 Research Design 
The 
literature 
review 
reveals 
that 
necessity 
based 
immigrant 
entrepreneurship in Korea is growing area of interest and there has been 
limited investigation done on this subject before. The nature of this study is 
exploratory which demands a theory building, this brings us to a conclusion 
that qualitative study is an appropriate technique for this research area. 
The subject of research requires richness in data that qualitative are 
able to provide. The qualitative research is non-numerical in nature and it is 
used to articulate people
’
s beliefs, behaviors, experiences, attitudes and 
interactions. It enables researchers to extensively view the data and gives 
voice to the research participants to share their views in depth. As (Gillham, 
2000) elaborated, qualitative research let the researchers to 
“
get under the 
skin
”
and focus on the details of the processes that lead towards certain 
results than results itself . 
The previous section has outlined the need of qualitative techniques 
for this study but the next step is to find out what specific strategy can 
provide the best grounds for research questions. (Eriksson and Kovalainen 
(2015) has defined four approaches for qualitative research: discourse 

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29 
analysis, case study research, ethnography and reflective phenomenology. 
From these approaches case study will be used for this research. A case 
study is an ideal technique to use when there is not enough prior research 
exists since case study doesn
’
t rely on previous knowledge (Eisendhardt, 
1989). There are many ways to conduct a case study so it should be decided 
what technique will be applicable on this research. 
Eriksson and Kovalainen (2015) has divided the case study into two 
types: intensive and extensive case study. Intensive case studies take into 
account a particular case to investigate the research area while on the other 
hand, extensive approach focuses on multiple cases or individuals. 
From the beginning of the research it was observed that single case 
study will be insufficient and as (Yin Robert, 1994) suggested that single 
case study is appropriate to do only if it is revelatory and unique. However, 
multiple case studies add to the validity and reliability of the research as well. 
Therefore, it prompted the idea of selecting 5 cases of necessity based 
immigrant entrepreneur
’
s businesses from South and Central Asia. The 
parameters for selecting the businesses is based on their survival in the 
industry which was determined by previous literature (Yin Robert, 1994) has 
considered three years enough to indicate the survival of small businesses. 
As argued by (Stake, 2000), for case studies the sample size is relatively 
small and in order to conduct an intensive study it is appropriate to choose a 
sample by using purposive sampling instead of random sampling technique. 
The purposefully selected multiple cases will provide insights of the 
research subject and they will allow us to get the broader view of the 
survival of immigrant restaurant businesses. This decision was also 
influenced by location in order to cover immigrant restaurants specifically 
those located at major cities across South Korea, cooperation, relevance in 
terms of nationality, size, uniqueness and heterogeneity to ensure the 
diverse representation of business owner nationalities. Moreover, the focus 

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30 
of the study was to find cases who are not outliers and significantly different 
that others instead the focus was to find normal cases of immigrant 
entrepreneurs. 
3.2 Data Collection Techniques 
The limited prior research on necessity immigrant entrepreneurship has 
made semi structured interviews an ideal choice to investigate the research 
questions (Eriksson & Kovalainen, 2015). Semi-structured interviews will be 
conducted with business owners along with follow up interviews if needed. 
Prior to the interview, the propositions developed in the theoretical model 
will be shared with interviewees and their queries will be assisted in order to 
give them clarity of the possible questions that will be asked during 
interviews. Face to face interviews will be conducted and each interview will 
take approximately 1 hour.
The interviewer will seek permission from informants in order to tape 
the sessions and also to do additional follow up interviews to seek 
clarification of comments made to discuss events which will be relevant to 
the subject of the research. Informants will be asked to be friendly and also 
to present relevant documents such as annual reports or restaurant 
brochures in order to ensure the reliability of facts and figures quoted during 
the interviews. In order to identify the commonalities in the interviews, the 
transcripts of the interviews will be revisited to study individual cases in the 
light of existing literature and theoretical model. The focus of this study 
requires intimate understanding of survival factors for immigrants 
entrepreneurs and for this purpose theoretical model and propositions 
formulated by (Chrysostome & Arcand, 2009) will be used to carry out the 
investigation. 

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31 
3.3 Theoretical Model 
This study proposes a theoretical model which is comprised of various 
survival factors as explained in the previous chapter 2 of this research and 
these factors are divided into five categories: Ethno-cultural factors, 
financial factors, managerial factors, psycho-behavioral and institutional 
factors. 
3.4 Propositions based on Survival Factors 
In the light of previous literature that elaborated the survival factors in 
Chapter 2 we formulated various propositions, which are listed below under 
survival factors: 
3.5 Ethno-Cultural factors 
The ethno-cultural factors have been sub-divided into 4 sections as listed in 
Chapter 2: Ethnic-Market Niche (2.7.2), Ethnic Social Network (2.7.3), Ethnic 
Labor (2.7.4), and Ethnic Emotional Support (2.7.5) 
3.5.1 Ethnic Market Niche
On the basis provided information under the light of previous literature in 
section (2.7.2) we can formulate the following proposition:
Proposition No 1: The larger the size of the ethnic market
niche, the better the survival of the business of the necessity
immigrant entrepreneur. 

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32 
3.5.2 Ethnic Social Network, Ethnic Labor and Ethnic Emotional Support 
The propositions resulting from Ethnic Social Network (2.7.3), Ethnic Labor 
(2.7.4), and Ethnic Emotional Support (2.7.5) can be formulated as follows: 
Proposition No 2: The ethnic social network can contribute to
the survival of the business of the necessity immigrant
entrepreneur. 
Proposition No 2a: The larger the size of the ethnic labor pool, 
the better the survival of the business of the necessity
immigrant 
entrepreneur. 
Proposition No 2b: The higher the level of the ethnic emotional 
support, the better the survival of the business of the necessity 
immigrant entrepreneur. 
3.6 Financial Factors 
The financial factors have been sub-divided into two sections: start-up 
capital (2.8.1) and emergency loans (2.8.2).
3.6.1 Start-up Capital 
The proposition resulting from Start-up Capital (2.8.1) can be formulated as 
follows: 
Proposition No 3: The higher the degree of access to startup capital, 
the better the survival of the business of the necessity immigrant 
entrepreneur. 
3.6.2 Emergency Loans 
The proposition resulting from Emergency Loans (2.8.2) can be formulated 
as follows: 

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33 
Proposition No 4: The higher the degree of access to
emergency loans, the better the survival of the business of the
necessity immigrant entrepreneur 
3.7 Managerial factors 
The managerial factors have been sub-divided into 2 sections: Education 
Level (2.9.1) and Previous Experience (2.9.2). 
3.7.1 Education Level 
The proposition resulting from Education Level (2.9.1) can be formulated as 
follows: 
Proposition No 5: The higher the education level of the
necessity immigrant entrepreneur, the better the survival of his
or her business. 
3.7.2 Previous Experience 
The proposition resulting from Previous Experience (2.9.2) can be 
formulated as follows: 
Proposition No 6: The longer the previous work experience of 
the necessity immigrant entrepreneur, the better the survival of his
or her business. 
3.8 Psycho-Behavioral Factors 
The psycho-behavioral factors have been divided into 2 sections: Risk 
Aversion (2.10.1) and Commitment (2.10.2) 

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34 
3.8.1 Risk Aversion
The proposition resulting from Risk Aversion (2.10.1) can be formulated as 
follows: 
Proposition No 7: The lower the risk aversion of the
necessity immigrant entrepreneur, the better the
survival of his or her business.
3.8.2 Commitment
The proposition resulting from Commitment (2.10.2) can be formulated as 
follows: 
Proposition No 8: The higher the level of commitment
of the necessity immigrant entrepreneur, the better
the survival of his or her business. 
3.9 Institutional Factors 
The propositions resulting from Institutional Factors (2.11) can be formulated 
as follows: 
Proposition No 9: The higher the institutional support,
the better the survival of the business of the
necessity immigrant entrepreneur. 
Proposition No 9a: The higher the access to
counseling programs, the better the survival of the
business of the necessity immigrant entrepreneur. 
Proposition No 9b: The more favorable the system of

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35 
taxes incentives, the better the survival of the
business of the necessity immigrant entrepreneur. 
3.10 Investigation of Theoretical Model 
In order to investigate the aforementioned survival factors, a multiple case 
analysis will be conducted as shown in Figure 1. 
3.11 Research Evaluation 
According to Eriksson and Kovalainen (2015), the evaluation of a qualitative 
study is based on the quality and trustworthiness of the study. Furthermore, 
those researches which are based on the critical point of view of the