Objective institutionalized barriers and subjective performance factors of new migrant entrepreneurs

The purpose of this paper is to explain how the “objective” institutionalized barriers (of which social, human and financial capital are decisive factors) and the subjective performance of new migrant entrepreneurs jointly affect their business attitudes and observed behavior.

The paper’s analysis of individualized performance factors (dependent on how “objective” institutionalized barriers are subjectively construed) – in line with the theory of planned behavior – enables a response to recent calls to embrace complexity and pluralism in entrepreneurship through applying social constructivist lenses. Semi-structured interviews were conducted with 32 Eritrean entrepreneurs, and the empirical data were subjected to grounded theory analytical procedures and interpretative phenomenological analysis theoretical coding.

Six core beliefs mitigated entrepreneurial attitudes independently from the objectivized institutionalized barriers: know-how needs to be acquired formally; available sources of financing are internal, and scarce; market expertise is in the books, rather than in the market; blending in the host country’s culture is uncalled for, and the resulting difficulty of operating in the “foreign” market is a price worth paying; risk is to be avoided at all cost; and strong intra-communal bonds need not entail support for their business activity, rendering external contacts hardly necessary or trustworthy.

The paper concludes with recommendations potentially informing policies and targeted interventions by highlighting that any policy intervention or an attempt at structural change of conditions in which new migrant entrepreneurship unfolds should consider entrepreneurs as “performing” individuals, as well as representatives of wider cultural, economic and social dynamics relating to these “objective” institutionalized barriers.