Johan P. Larsson (p), Özge Öner (p), Martin Andersson (p)

Mina Akhavan

We explore the effects ethnic enclaves in residential neighborhoods on non-employed immigrants’ transition into entrepreneurship. Specifically, we investigate whether having many local entrepreneurs in the same ethnic group induces individuals to leave unemployment for entrepreneurship. Using geocoded Swedish full-population data for 2011-2012, we exogenously partition Sweden into a grid of 1 km2 squares to represent neighborhoods, and study the behavior of the two largest non-European immigration groups: South-Saharan Africans and Middle Easterners. We demonstrate a robust tendency for people to leave non-employment for entrepreneurship, if many local members of the local diaspora are running their own firms. The results are generally insignificant with respect to entrepreneurial activity in other groups. The results support local ethnic social capital as important for immigrants outside the labor market. In conclusion, we discuss the powerful policy implications of the resulting social multiplier.

Heike Delfmann (p), Sierdjan Koster

Johan P. Larsson

Businesses started in disadvantaged or remote regions are commonly assumed to be motivated by necessity, as employment opportunities are limited and people have little to lose in starting their own business. Yet people have various motivations for becoming self-employed. A key step in gaining further insights into new business creation in these areas is developing a better understanding of start-up motivations. Location decisions taken by firms would rationally include an assessment of regional conditions and developments, which raises the question: why do people choose to start their firm in a regional context of rurality and strong ageing and how does this context influence their decision making and ambitions throughout the start-up process? Two case study regions are included: rural Northumberland (UK) and rural Drenthe (NL), both of which face a declining workforce and are strongly ageing. By means of semi-structured face-to-face interviews with small business owners, the aim is to determine how the regional context influences start-up behaviour. The results indicate that the lifestyle in a rural region is very influential for the small business owners, whereas population ageing is not. Local embeddedness seems to offer the support and desire to establish a business despite the (for profit) irrational location choice, choosing personal happiness over profit maximisation.

Mina Akhavan (p), Ilaria Mariotti

Heike Delfmann

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