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Immigrant family businesses help generate employment and income (Ram, 1997), and play an important role in the economies of many countries. In the USA 11.6 percent of the total business income is generated by immigrant enterprises, with the ratio exceeding 25 percent in certain states such as California, New York, New Jersey and Florida (Fairlie, 2008). In addition, 18 percent of small businesses in the USA are owned by immigrants, employing over four million people and accounting for 30 percent of growth between 1990 and 2010 (Kallick, 2012). Such businesses are critical to the lives of immigrants who face limited economic opportunities in their host countries and use self-employment as a means to upward mobility.
Immigrant family businesses possess a competitive advantage due to the unique resources and capabilities generated through family networks. Many immigrants migrate in family groups, which encourage reliance on family bonds to provide financial and human resources. Family members engage in social exchanges that carry a history of past expectations and mutual interdependence. Loans from family members can help in starting and expanding family businesses; and family labor can be trusted to handle sensitive transactions, lower costs and reduce opportunism (Sanders and Nee, 1996). The interrelatedness and dynamic interplays between family structure and enterprise create a distinctive social wealth that can be tapped, although such interrelatedness may differ in immigrant enterprises (Adendorff and Halkias, 2014). Thus, family businesses allow immigrants to establish themselves in a new country and enable them to use their education and experience, along with access to family capital and labor to organize and operate the business.
In this research, we explore the phenomenon of immigrant family businesses (i.e. businesses owned and/or founded by an immigrant or immigrants and controlled by a single family) through the framework of social capital, and examine how the benefits derived from social relationships and network resources can play a critical role in the success of immigrant family businesses. The literature has focussed on the reasons that immigrants start their own businesses and the factors that influence the survival of such businesses (e.g. Basu, 1998; Toussaint-Comeau, 2008). We add to this literature by examining social capital and network benefits in the context of immigrant family businesses. Although the theoretical work on social capital...