The Changing Significance of Ethnic and Class Resources in Immigrant Businesses: The Case of Korean Immigrant Businesses in Chicago

Abstract

Contemporary Korean immigrant businesses depart from the traditional patterns of immigrant businesses in two important respects. First, minority areas such as black neighborhoods are more important market places for Korean merchants than their own Korean community. Second, though ethnic solidarity and mutual cooperation among Koreans are still viable in Korean immigrant businesses, class interests and class resources are increasingly important as the basis of Korean immigrant businesses. Therefore, collective approaches to business on the basis of ascriptive ties such as extended kinship or regional ties became irrelevant for the recent Korean immigrants. Instead individualistic approaches become more significant. In order to account for the role of ethnicity and class in contemporary Korean immigrant businesses, this study attempts to assess the relative contribution of ethnic and class resources to Korean immigrant businesses and to examine how the relative significance of ethnic and class resources changes over the course of business development. Empirical results tend to support the arguments that while ethnic resources (i.e., financial resources, information or business advice one can gather from family members, friends or rotating credit associations) are important at the initial stage of business, they become irrelevant or insufficient at the advanced stage, and that class resources (i.e., individual human capital) become more important to determine the success level of business at the advanced stage of business development.

The Effects of Ethnicity, Families and Culture on Entrepreneurial Experience: An Extension of Sustainable Family Business Theory

“…Korean immigrants maintain strong ethnic social ties through organizations such as churches. However, they have no powerful intermediate ethnic organizations that effectively coordinate and regulate economic activities, sometimes leading to intra-ethnic competition and price wars, decreasing profit margins and threatening business survival (Kim and Hurh, 1985;Yoon, 1991).…”

“…Korean immigrant businesses rely heavily on family labor. Many spouses provide not only unpaid labor, but also function as business collaborators (Min, 1988;Yoon, 1991). About 21 percent of Korean immigrant entrepreneurs in Atlanta reported that adult children (over 16 years old) helped them with business after school and/or during weekends (Min, 1984).…”

Role Demands, Difficulty in Managing Work-Family Conflict, and Minority Entrepreneurs

“…Previous research regarding minority entrepreneurs has noted the prevalence of husbandwife business teams in Korean immigrant businesses (Nam and Herbert, 1999;Yoon, 1991). To the extent that non-immigrant Korean-American businesses follow this basic model, we expect to find greater spousal involvement in decision-making in this ethnic group.…”

Economic Incentive, Embeddedness, and Social Support: A Study of Korean-Owned Nail Salon Workers' Rotating Credit Associations

“…More recently, questions have been raised about the role of RCAs as a key source of start‐up capital in light of evidence that the mobilization of start‐up capital for Korean immigrant businesses mostly comes from other sources – e.g. , personal savings, loans from kin or friends, bank loans, or money brought from Korea – not from RCAs in the Korean American community (Yoon, 1991, 1997; Min, 1996; Park, 1997; Lee, 2002). Moreover, among Korean immigrant merchants, RCAs have evolved gradually from serving economic functions toward mainly fueling a social and mutual aid role, like friendship RCAs in Korea (Kim, 1981; Park, 1997; Yoo, 2001).…”