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Factors Contributing to Ethnic Business: A Comprehensive Synthesis

Queens College, The City University of New York, Flushing, U.S.A.

This paper provides a comprehensive synthesis of the findings on factors contributing to ethnic business by reviewing the literature. Labor market disadvantages push minority members toward self-employment in small business. However, only those minority groups with advantages for small business in one way or another can develop a significant level of ethnic business. Some minority groups have cultural characteristics conducive to the development of small business such as work ethic, future orientation and ethnic ties. Immigrant and alien groups have other non-cultural advantages for small business associated with their alien status. In addition, the social structure of the host society can also encourage or constrain ethnic business. Residential succession and racial segregation, the changes in industrial structure and government policy have been indicated as major structural factors that have influence on ethnic business in western industrial societies.

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