Anuradha Basu

The Interaction between Culture and Entrepreneurship in London's Immigrant Businesses

This article examines the interaction between culture and immigrant entrepreneurship with reference to Londons ethnic minorities. It compares the cultural attributes of different ethnic groups and how these affect their entrepreneurial behaviour. The article reports and analyses the results of 163 interviews with entrepreneurs from six different immigrant communities in London: Indian, East African Asian, Pakistani, Bangladeshi, Turkish Cypriot and Turkish. The findings indicate diversity in business entry motives, patterns of start-up finance and family involvement in business among the different ethnic groups. These may be explained by differences in several cultural attributes including family tradition, migration motives, religion, family links, business experience and educational attainment. The evidence suggests that the interaction between culture and entrepreneurship is stronger in the case of some ethnic groups than others.

An Exploration of Entrepreneurial Activity among Asian Small Businesses in Britain

This paper investigates various aspects of Asian entrepreneurship based on a survey of small Indian, Pakistani and Bangladeshi businesses in Britain. It analyses the motives for business entry, the choice of initial business, the factors that influence business success and the validity of treating Asian businesses as a homogeneous group. It cannot support the hypothesis that Asians were pushed into self-employment in order to avoid unemployment. The nature of entrepreneurial entry, predominantly through small retail businesses, depends largely on the access to informal, rather than formal, sources of capital and information or advice as well as on the entrants previous experience. Business success appears to be closely related both to the share of personal capital invested at start-up and to the entrepreneurs educational qualifications. The evidence suggests that the motives for business entry differ among the three Asian communities studied although that does not seem to have a lasting effect on their business success. The predisposition of many well educated Asian migrants towards establishing businesses with their own capital in an unfamiliar environment illustrates their entrepreneurial spirit. The paper points to the potential role of banks and government agencies in encouraging the creation of many more such small businesses in Britain.

Determinants of South Asian Entrepreneurial Growth in Britain: A Multivariate Analysis

This paper aims to contribute to our understanding of the factors influencing South Asian entrepreneurial growth in Britain. It develops a multivariate model along the lines of small business economics but includes cultural and social variables. The theoretical model specified assumes that cultural factors have an augmenting effect on socio-economic factors. A distinction is also drawn between initial entrepreneurial characteristics and later expansion strategies used. The empirical model, based on the general-to-specific approach, can explain almost 60 per cent of entrepreneurial growth. The results suggest that moving away from a style of management based on immigrant culture has a positive impact on growth. This requires greater delegation of responsibilities to non-family employees. At the same time, strengthening links with the country of origin has a positive impact on growth. While the commitment to work hard at start-up is essential, human capital factors like the entrepreneurs educational attainment and employee training appear to be more crucial than financial resources in contributing to growth.

South Asian entrepreneurship in Great Britain: factors influencing growth

Analyses the factors influencing South Asian entrepreneurial expansion in Great Britain and the validity of conventional wisdom which attributes its success to cultural factors. It suggests that entrepreneurial growth depends positively on educational attainment, personal savings invested at start‐up, hard work in the initial stages, and the delegation of responsibilities to non‐family members. Further analysis indicates that later entrants into business gained relevant prior work experience and focused on serving non‐Asian customers, which may have contributed towards their success. The pursuit of constant product and technological improvement and employee training have also influenced growth. There is strong evidence that entrepreneurs with larger‐sized businesses have developed international linkages and focused on one key business area.

Family Finance and New Business Start‐ups

After bank finance, borrowing from family and friends is the chief source of funds for new business start-ups in many countries, including the UK. Yet there has been virtually no treatment of this issue in the literature to date. We rectify this omission by developing a model of lending behaviour in which family members may have selfish or altruistic motives. We identify the key determinants of family lending using a unique data on Asian entrepreneurs in Britain. Copyright 2001 by Blackwell Publishing Ltd

The role of institutional support in Asian entrepreneurial expansion in Britain

This paper examines the role of formal and informal institutional support in the expansion of Asian‐owned businesses in Britain, based on a large survey of Asian entrepreneurs based in Britain. More specifically, it investigates the significance of formal (bank) sources of finance relative to that of informal (family or personal) sources of finance at start‐up and the implications of that reliance on subsequent business expansion. The paper also examines the wider role of informal family and community networks in providing access to information and labour, in addition to capital, and the impact of these support networks on business expansion. The methodology used is that of quantitative, statistical analysis supplemented by qualitative survey data. The evidence suggests that both formal and informal institutional support have played a limited role in fostering Asian entrepreneurial expansion in Britain. Although bank finance was valuable in preventing undercapitalised ventures, rapidly growing Asian businesses did not rely on bank finance either at start‐up or for expansion. This may be attributed to the short‐term perspective of banks. Rapidly growing Asian businesses did not rely on formal sources of advice. Nor did they rely on family or community networks for finance or labour. The Asian entrepreneurs who rapidly expanded their businesses invested their personal savings at start‐up, relied on their family and friends for advice, employed non‐Asian labour and invested in employee training. These results imply that Asian entrepreneurs aspiring to grow need to advance beyond the traditional reliance on informal support networks for finance and labour. Formal institutions could offer long‐term debt or equity finance, encourage investment in employee training, and provide appropriate training schemes.