Social Capital: Two Case Studies of Chinese Small Business in the Greater Phoenix and Los Angeles Areas

As immigrants in the United States, Chinese small business entrepreneurs often encountered social and cultural barriers in the areas of finance, language, and employment in their new environment. This dissertation investigated how they utilized social capital to surmount the embedded disadvantages of an unequal market in their adopted country. The findings presented in this qualitative descriptive multi-case analysis, conducted in the greater metropolitan regions of Phoenix and Los Angeles, demonstrated the importance of social and transnational ties created in the United States within the local Chinese community as well as their social connections brought from China.

Drawing upon the data from in-depth interviews and informal observations, this dissertation was guided by three research questions: (a) What barriers do immigrant small business owners encounter? (b) What social connections provide help for immigrant small business owners to overcome those barriers or intensify their disadvantaged situations? (c) How do social networks influence immigrant small business development? The findings revealed many provocative facts on how social capital stimulated Chinese immigrant small business owners.

The influence of local and strong ties especially provided essential start-up funds, an affordable labor force. Those ties also provided authentication for business information provided by weak ties. Although the governments’ Small Business Administration empowers small business by various programs because it is an important social and economic element in the U.S. market, the Chinese community rarely utilized this support.

Transnational connections played an important role in the relatively mature market found in Los Angeles, but indeed all respondents in both case studies exhibited great interest in utilizing transnational connections to explore business opportunities. Regional connections provided a powerful resource for Chinese small business to create business alliance and increase their market competitiveness. Social capital embeds in a complexity of political, economic, social and personal backgrounds. In summary, social capital was an essential resource for Chinese small business when they encountered the barriers in the local market. From the findings, this dissertation’s scholarly contribution adds to the field of social capital studies by combining the investigation of social capital, embeddedness, intersectionality and transnational connections in respect to study immigrant entrepreneurship.