The Role of Social Networks in the Creation and Development of Business among African Immigrants in Madrid Area (Spain)

Abstract

Social networks provide entrepreneurs with opportunities to gain information from a wide variety of sources, to get capital, to test idea of business, to gain moral and material support, and to get talents for the venture. Immigrants use their social networks as a strategy to maximize their opportunities of integration and success in the host country. This study explores the impact of social networks on African immigrants business creation and growth in Madrid area (Spain). A survey was conducted among 200 African immigrant entrepreneurs in Madrid area, using faceto-face interviews by mean of a questionnaire. The findings indicate that more than 75 per cent of African immigrant entrepreneurs interviewed decided to go abroad for Political instability in their home country and for economic reasons. Moreover, this study shows that the social networks play an important role in African immigrants for the start up and development of business. Family, friends and ethnic ties are among the largest part of the social networks where African entrepreneurs find the main resources they need to run their business. African entrepreneurs value the positive role of cultural factors in their success. Practical implications and recommendations for future researches are discussed.

African Immigrant Entrepreneurs in South Africa: Exploring Their Economic Contributions

“…For example, in the United States of America, it has been established that immigrant entrepreneurs significantly contribute to the technology and engineering sectors of the economy (Hunt & Gauthier-Loiselle, 2010;Hart & Acs, 2011;Fairlie & Lofstrom, 2014). Scholars acknowledges that immigrants have striking entrepreneurial propensity and their businesses significantly contribute to job creation, innovation, transfer of skills to locals (DeLancey, 2014;Dele-Ijagbulu & Chirau, n.d.;Kalitanyi & Visser, 2010;Mabadu, 2014;Ngota, Rajkaran, Balkaran, & Mang'unyi, 2017;Ojong, 2006;Saxenian, 2002;Vertovec, 2002) and gross domestic product (GDP); (Liebig & Mo, 2013;Brewer & Gibson, 2014). Therefore, through their entrepreneurial activities, immigrant entrepreneurs create wealth that reduces locals' dependence on the government for providing jobs (Mabadu, 2014), as they predictably become the leading employers in South Africa's economy (Kongolo, 2010).…”

“…Although entrepreneurship provides immigrants' societal self-respect in their host country, African immigrant SME owners face many obstacles (Asoba & Tengeh, 2016). For instance, according to Mabadu (2014), immigrants face major difficulties with regard to settlement and integration into the job market, which is as a result of discrimination and 'limited' skills. For example, in South Africa, perceptions, particularly about black foreigners regarded as 'dangerous' and 'undesirable' -often termed by locals as 'kwerekwere' (Maharaj, 2002) -gradually increased the 'Afrophobia' phenomenon in recent years (Crush, Ramachandran, & Pendleton, 2013).…”

“…This 'phobia' has adverse consequences on job creation and trading activities (Hunter & Skinner, 2003). Further issues that hinder the flourishing of African immigrant businesses are gathering resources to start a business (Fatoki & Patswawairi, 2012;Urban & Naidoo, 2012;Mabadu, 2014;Khosa & Kalitanyi, 2015), access to reasonable business premises (Khosa & Kalitanyi, 2014), stringent government regulations (Asoba & Tengeh, 2016), and inadequate managerial and financial management competencies (Kim, Park, & Wier, 2012;Smith & Watkins, 2012).…”