High-growth entrepreneurial firm funding: a qualitative study of native-born and immigrant entrepreneurs

The entrepreneurial financing of the immigrant entrepreneurs: a literature review

“…The IEs' accessibility to finance is dependent on some antecedents that shape the financing decision that is taken either on the demand side of the IEs (e.g., Moghaddam et al 2017;Tengeh and Nkem 2017; see more in Table 5) or on the supply side of the formal and informal financiers (e.g., Ding 2018; Rouse and Jayawarna 2011; see more in Table 5). The plethora of identified antecedents represents the field's strength, providing a nuanced understanding of the IEs' financial decision-making process and of the consequences and barriers that arise from these decisions (e.g., Biggs et al 2002;Ram et al 2003; see more in Table 5).…”

“…The field's discussion about the antecedents to the financing decisions reveals some weaknesses. First, the field primarily focuses on the general antecedent factors that are usually accounted for when it comes to dealing with financing on the supply and demand sides, regardless of the IEs per se, for instance, factors related to creditworthiness and financial adequacy, such as technical risks (e.g., Fraser 2009;Muchineripi et al 2019; see more in Table 5), personal-and business-related characteristics (e.g., Bates 1997;Biggs et al 2002;Rouse and Jayawarna 2011;Smallbone et al 2003;Yazdanfar and Abbasian 2014; see more in Table 5), and the personal and family wealth (e.g., Haynes et al 2008;Ruiz-Vargas 2000;Sanders and Nee 1996; see more in Table 5), besides ownership-related factors, such as the dilution effect of external financing (e.g., Frid 2014; Kushnirovich and Heilbrunn 2008;Moghaddam et al 2017; see more in Table 5). These factors apply for all economic players, including IEs, when dealing with a financing inquiry at the supply and demand sides.…”

“…For example, a study by Smallbone et al (2003) suggests that there is a necessity to improve the IEs' financial knowledge and skills by means of training and education, which will ultimately support their financing eligibility in the formal market. Moreover, Bird and Wennberg (2016) and Moghaddam et al (2017) emphasize the importance of co-ethnic agents and native family members in bridging the IE and mainstream markets. This bridging facilitates IE's learning and subsequent alleviation of the barriers related to asymmetry of information.…”

“…Moreover, compared to ethnic entrepreneurs, who tend to remain within their co-ethnic networks, the IEs are prone to break out from these networks into the mainstream networks looking for better opportunities (e.g., Chaganti and Greene 2002;Evansluong et al 2019;Kitching et al 2009;Ram et al 2003). Yet these differences between immigrant and ethnic entrepreneurs are less profound compared to the mainstream nativeborn peers, 1 in terms of easier mobilization of resources and access to entrepreneurial opportunities (e.g., Aldén and Hammarstedt 2016;Fairlie and Lofstrom 2015;Moghaddam et al 2017;Yazdanfar and Abbasian 2014). Due to their distinct characteristics, IEs face numerous barriers in securing financing to survive and to grow their ventures (e.g., Barrett et al 2002;Fraser 2009; Kariv and Coleman 2015); however, the presence of these barriers might also prompt the IEs to find innovative ways of overcoming them (c.f.…”

Transnational entrepreneurship, social networks, and institutional distance

“…In particular, the international business literature emphasizes the importance of the opportunity sensing process for foreign market opportunities exploration (Lu et al, 2010;Yeoh, 2000). Market information asymmetries often provide entrepreneurial opportunities which are not evenly recognizable to everyone (Ireland et al, 2003;Moghaddam, Aidov, DuVal and Azarpanah, 2017;Shane and Venkataraman, 2000). In the context of transnational entrepreneurship, TEs have a unique advantage of recognizing special opportunities associated with their unique information and knowledge of their COO and COR which is not readily available to other competitors and thus may serve as a source of competitive advantage.…”