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ANALYSIS

Our analysis is guided by the literature on immigrant entrepreneurship, driven by the theoretical frameworks presented above. Since our sample contains both respondents who are born in the U.S. and those who immigrated here, we have an excellent opportunity to assess the relationship between theoretically driven business characteristics and immigration, as well as the comparisons between a conceptually derived ethnic entrepreneurship and a governmentally defined grouping.

Comparison of demographics

In our sample 87% of the respondents are immigrants. The reasons given for immigration are found in Table 1. It can be seen that 28.3% came in pursuit of educational opportunities and 26.1% came for business and economic opportunities. An additional 18.5% came to join their family while 16.3% more specifically came to join their spouse, . All of the reasons give above are "pull factors," or things which invite a person to a new country for better opportunities This means that the Pakistani/Ismaili are in the tradition of immigrants rather than refugees. In fact, only 3.3% were pushed out from their home because of conflict in their country of origin.

TABLE 1

Reasons for Immigration to the U.S. (Top 5)

Educational opportunities 28.30%
Business and economic opportunities 26.1
To join family 18.5
To join spouse 16.3
Conflict in country of origin 3.3

Table 2 allows us to compare the demographics of this community with those gathered from several other sources; The 1992 Economic Census—Survey of Minority–Owned Business Enterprises (SMOBE), the Characteristic of Business Owners database (CBO), and U.S. Economic Census data on all U.S. firms. It is essential that the different bases of comparison are emphasized in order to understand the context of the study. The category of comparison for the SMOBE is "Asian, Pacific Islander, American Indian, and Alaska Native. Obviously for this grouping neither "common national background" nor "migration experiences" are shared (Waldinger, Aldrich, & Ward, 1990). The CBO category most closely aligned with our study is "Other Minority–Owned Businesses", as distinguished from "Non–minority male–owned," "Women–owned," "Black–owned," and "Hispanic–owned." And finally, the last column reports on all U.S. firms and is included as a point of reference.

TABLE 2

Characteristics of Firm and Business Owner

Characteristics of Firm Pakistani/Ismaili SMOBE1 BBO2 All U.S. firms3
         
Own enterprise (Full sample) 59.80%      
Own enterprise (Immigrant) 59.5      
Own enterprise (Native born) 66.7      
Type of enterprise        
Agriculture 0 2.6 3.7 3.4
Construction 0 5.3 4.3 10.6
Manufacturing 0 2.9 2.9 3
Transportation 0 4 3.4 4.1
Wholesale trade 10.2 3.3 2.9 3.1
Retail trade 51 21.1 24.4 14.4
Finance, insurance, real estate 4 10 7.4 11.3
Services 34.4 46 45.9 45.1
Business and Repair Services 14.2      
Personal Services 6      
Professional (Engineering) 12.2      
Health Care 2      
Industries not classified   4.7 5.1 5.1
Sales $480,210 $164,422 90,350 $192,672
Number of full–time employees 4.22 1.42    
Characteristics of Firm Owners        
Gender – Male 87.3      
Age 39      
Education        
Less than high school 13   11.6  
High school graduate 61.1   32.5  
College graduate 18.5   27.3  
Graduate school 7.5   21.2  
Marital Status 79.6   77.1  
Self–employed relative 41.8   35.3  

1 1992 Survey of Minority–Owned Business Enterprises. Category = Asian, Pacific Islander, American Indian, and Alaska Native

2 1987 Characteristics of Business Owners. Category = Other Minority–owned

3 1992 Survey of Minority–Owned Business Enterprises. Category = all U.S. firms

The type of enterprise for our sample is seen to differ from all the provided sources of comparison by two particular points, the frequencies of Retail trade and Services. Retail trade is more than twice as frequent in our study than in any of the others, while Services is more than 10% lower than any of the others. An earlier study of this population had identified several pockets of light manufacturing within the community (Greene & Butler, 1996). This finding was not replicated in this survey.

The fact that the SMOBE and the CBO are so similar in their reporting of the industry participation of conceptually related populations is expected since the SMOBE sampling frame is one of the sources of the CBO sample. However, while the percentage points vary, the order of the top five industrial sectors is identical for the SMOBE, the CBO, as well as All U.S. firms.

Whereas the industrial sectors are similar, the average sales is most certainly different for all samples, with the reported approximate annual sales for our sample being more than double that of the others. This number must be treated with caution due to a large amount of missing data. However, anecdotal evidence of the sample supports a conclusion of significant household incomes. The number of full–time employees is also larger than that reported in the SMOBE (4.22 and 1.4 respectively). The size of the businesses when measured by either Sales or Employees shows that the "small" businesses in the Pakistani/Ismaili sample are larger than those in either of the other minority based samples, as well as the average size of all U.S. firms.

Table 2 further informs us as to the characteristics of the business owner. Our sample is 87.3% male, 79.6% married, with a mean age of 39.0. The CBO is the only data base allowing for the comparison of owners and the comparison shows decidedly fewer graduates of both college and graduate school in our study. However, the mean years of education for our sample is 14.1, indicating education levels beyond high school. Our respondents also report a greater frequency of having a self–employed relative, a potential avenue to exposure to learning about the creation of businesses.

We now turn to sources of capital for the development of enterprise. Table 3 provides a comparison of the source of business creation funds for the Pakistani/Ismaili sample, the CBO, and to again offer the contextual analysis, data from the National Federation of Independent Businesses.

Although developed independently, the categories reflect both the variety of sources drawn upon for start–up capital, as well as the heavy concentration of those who use personal savings as at least one of those sources. Personal savings is the most often mentioned source in every study included here. Family and friends are second for both the CBO and the NFIB. However, there are unusual differences in the Pakistani/Ismaili community once you go beyond personal savings. A community sponsored fund is available to members of the community for business start–up funds. Use of the fund is contingent upon group membership. This type of fund is not explored in either of the other studies, and indeed, the community effect on this particular source is not identifiable or even relevant in either of the other two studies.

The finding on venture capital is also especially intriguing because it appears to be beyond the proportion of reason. The type and stage of businesses discussed in this question are usually not a target for venture capitalists, being too small, too new, and in an industrial sector generally not considered attractive enough to raise venture capital. Indeed, the finding that 18.2% of this sample reports using this type of funds is questionable and needs to be revisited. One potential explanation is a lack of understanding of the term, or perhaps a commingling of the venture capital term with the ethnic community fund.

TABLE 3

Sources of Capital1

  Pakistani/Ismaili CBO NFIB
Personal Savings 80 na 74.6
Family and friends 12.7 22.8 28.7
Personal loans 5.5 2.9  
Credit cards 1.8 2.9  
Mortgages 3.6 2.8  
Government program 3.6 2.9 3.2
Ethnic community fund 27.3 na  
Venture capital 18.2 na 1.3
Other 1.8 0.5  
Commercial bank loan na 12  
Former owner na 3.9 8.9
Not applicable na   58.64
Banks     45.8
Other individuals     7.8
Suppliers/trade credit     6.3

1 Data represents percentage of respondents reporting using each source.

2 1987 Characteristics of Business Owners

3 National Federation of Independent Businesses. Source: Cooper, as cited in Vesper, 1994

4 Includes those who either didn't require or borrow capital to start

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