Does family involvement help small migrant businesses survive? A closer examination of family in migrant entrepreneurship

Abstract

Drawing on the resource-based view, this study aims to examine how family involvement in migrant-founded small businesses gives rise to distinctive resources that help these businesses survive. Using microdata from the 2007 US survey of business owners (SBO), this study uses logit regression modeling to test the hypothesized relationships. Results show that small businesses founded by migrant entrepreneurs are less likely to survive and that family involvement weakens the negative relationship between founder migrant status and business survivability. In addition, the positive moderating effect associated with family involvement is further strengthened by the use of external/borrowing startup capital, thus migrant families founded small businesses with access to external capital have the highest probability of survival. This study contributes to the literature on both migrant entrepreneurship and family business. This paper finds family involvement in the business, interacting with the founder’s migrant status, tends to create distinctive resource endowments that help to compensate for the resource constraints associated with migrant entrepreneurs. Such resource endowments may take the form of high levels of solidarity among migrant family members and the spanning role of the migrant kinship networks extended from the country of origin to the country of residence.