A framework for immigrant entrepreneur trajectories: integrating rural–urban contexts and necessity–opportunity entrepreneurship

Immigrant entrepreneurs play a vital role in the global economy, contributing to economic growth, international trade, and investment through both direct means (such as founding businesses) and indirect channels (Gomez et al., 2024; Light and Dana, 2025). Given that certain sub-regions exhibit higher levels of entrepreneurial activity than others, due to factors such as local entrepreneurial culture, community deprivation, and urban characteristics, further research is needed to explore immigrant entrepreneurship at the sub-national level (Dabić et al., 2020; Yin et al., 2025). The literature remains limited in explaining how spatial context, particularly rural and urban contexts, shapes immigrant entrepreneurial trajectories. In Southern Europe's more peripheral rural regions, some areas have recently seen an increase in migrant entrepreneurs. In the case of Portugal, it appears among the EU-EFTA countries with relatively high self-employment rates for EU immigrants, clearly above the group of countries with a lower incidence (OECD, 2024). This has profound impacts, especially in low-density areas, characterised by depopulation, ageing demographics and economic stagnation, where immigrants have increasingly regarded entrepreneurship as a viable alternative to traditional employment. (Galvão et al., 2025). These individuals are not only seeking to improve their own quality of life but are also introducing new ventures that often aim to unlock the untapped potential of rural territories (Torkington et al., 2025).

Although the urban–rural divide has been extensively documented across domains such as poverty, employment, and population dynamics, comparative studies of immigrant entrepreneurship across these spatial contexts remain limited (Evansluong et al., 2025; Kim and Orazem, 2025; Tuitjer and Thompson, 2025). Addressing this gap is essential to advancing understanding of how spatial contexts interact with entrepreneurial motivations, shaping processes of opportunity recognition, resource mobilisation, and socio-economic integration (Dabić et al., 2020; Evansluong et al., 2025). In response, this study seeks to deepen understanding of immigrant entrepreneurial trajectories by addressing two research questions: (1) how do rural–urban contexts and necessity–opportunity motivations interact to shape immigrant entrepreneurial trajectories? and (2) which distinct configurations of embeddedness mediate these spatial-motivational dynamics? To examine these questions, we adopt a sequential mixed-methods design that integrates a systematic literature review with a qualitative empirical study comprising 20 in-depth interviews with immigrant entrepreneurs operating in rural and urban regions of Portugal, complemented by a focus group and secondary data sources. This design enables the development of a context-sensitive analytical framework and typology that captures the interaction between spatial context and motivational drivers.

This study makes several contributions to the immigrant entrepreneurship literature. First, it identifies key gaps in existing research, highlighting priority areas for further inquiry. Second, it develops a new comprehensive framework of immigrant entrepreneurs' trajectories (Pioneers, Reactors, Vanguards, and Survivors) by simultaneously integrating rural–urban contexts and necessity versus opportunity-driven motivations, thereby responding to calls for greater theoretical diversity and the examination of unexplored national settings (Dabić et al., 2020). While prior studies have predominantly examined internal migration between rural and urban areas (Wen et al., 2024; Zhu et al., 2025), this study focussed on immigrant entrepreneurs across both contexts. Moreover, although the distinction between opportunity- and necessity-driven entrepreneurship has been widely explored, existing research has largely concentrated on OECD countries (Bedi and Jia, 2024) or ultraperipheral regions (Porfírio et al., 2024) with limited attention to rural–urban comparisons. Third, the study advances an antecedents-typology-outcomes framework grounded in a multi-level perspective, demonstrating how immigrant entrepreneurship emerges from the interplay between contextual environment, individual characteristics, and business characteristics. This approach delineates four types of immigrant entrepreneurs (Pioneers, Reactors, Vanguards, Survivors), each associated with distinct configurations of embeddedness and differentiated outcomes, including venture creation, adaptation, growth, or persistence in low-value markets. In doing so, the study reconceptualises spatial context as a dynamic mechanism that both enables and constrains access to resources, thereby shaping entrepreneurial trajectories and outcomes.

Fourth, it offers theoretical implications and recommendations for policymakers and practitioners to support immigrant entrepreneurs. Drawing on primary and secondary data from immigrant entrepreneurs and key stakeholders, the findings provide a robust basis for designing more targeted and context-sensitive support mechanisms in both rural and urban settings.

The remainder of the paper is structured as follows. The next section outlines the study overview, followed by the methods and findings of Study 1 (a systematic literature review) and Study 2 (qualitative approach). This is followed by a general discussion that integrates insights from both studies and concludes with implications, limitations, and directions for future research.

Two studies are planned and carried out to achieve the stated objectives (Das et al., 2024; Leso et al., 2024). We employed a mixed-methods approach, combining a systematic literature review (Study 1) with a qualitative study of immigrant entrepreneurs in Portugal (Study 2). Using multiple sources of data enhances the validity and reliability of the foundations for findings and recommendations (Blackburn et al., 2023).

To systematically search and organise the literature within the field, our methodology follows an evidence-informed literature review approach (Tranfield et al., 2003). The selection of articles was based on specific criteria. In December 2024, a search was conducted in Web of Science (WoS), which was chosen because it is considered one of the world's foremost and most respected bibliographic databases, owing to its stringent quality standards (Pires and Ferreira, 2025). Search terms represent a limitation of the review methodology, as it is virtually impossible to fully capture the topic under analysis with only a small number of keywords (Silva and Teixeira, 2009). Thus, we selected documents containing the terms “entrepreneur*” AND “immigra*” in the title, abstract, or keywords, resulting in 1,294 items, as those terms are the most related to the literature. In the next stage, only Article, Early Access, and Review documents were retained, reducing the total to 1,216 articles.

After filtering for English-language publications, the number decreased further to 1,194 items. Then, only papers classified under “Business, Business finance, Economics and Management” categories were included, narrowing the selection to 545 articles. Applying the ABS/AJG List criteria and considering rankings 3, 4, or 4*, the final selection was reduced to 378 papers. In the last stage, a thorough reading was conducted, identifying 165 articles specifically focussed on immigrant entrepreneurship, excluding those that did not meet the predetermined inclusion criteria (see supplementary material, Table A).

The study followed the PRISMA methodology, developed to support systematic literature reviews, enhancing scientific rigour and promoting the replicability of findings (Santos et al., 2026). In line with its flow model in Figure 1, the research protocol applied in this study is outlined.

One type of systematic review is the bibliometric review (Dabić et al., 2020). In this study, we applied the co-word bibliometric technique, using each article as the unit of analysis and the variables as the terms identified in the titles and abstracts of the 165 articles. This technique was selected because analysing term co-occurrence enables the identification and mapping of relationships among terms and their organisation into thematic clusters, thereby providing an overview of the state of the art in the field (López-Fernández et al., 2016; Saif and Islam, 2024). Using the software VOSViewer, we extract terms, treating each as a string of words in textual data, with the association strength determining the proximity between terms (van Eck and Waltman, 2007). The binary counting approach was employed, considering only whether a term appears in a document; it does not consider the term's frequency within a single document. With this approach, 3,999 terms were identified.

After setting a minimum occurrence threshold of eight, 110 terms remained. While other studies adopt different numbers depending on the topic analysed, eight was considered suitable in this study because it captures the key terms in the immigrant entrepreneurship literature (Dias et al., 2019). VOSViewer computed the 60% most relevant terms, reducing the set to 66. Ultimately, we eliminated the irrelevant terms, such as “article”, resulting in a final selection of 23 key terms. Finally, we generated a map showing the relationships among these 23 terms and their grouping into thematic clusters (van Eck and Waltman, 2007).

For the analysis of the articles, we will adopt a two-stage approach: first, a systematic literature review will be conducted to examine existing research and identify key gaps in the field of immigrant entrepreneurship; subsequently, these identified gaps will inform the design and focus of an empirical qualitative study aimed at exploring and addressing the uncovered issues in greater depth.

Applying the bibliometric technique of term co-occurrence to the 165 articles included in the review (Figure 2), we obtained three thematic groups (clusters): Individual characteristics (red cluster), Business performance (green cluster), and Entrepreneurial motivations and integration (blue cluster). This derives directly from our bibliometric analysis rather than from an a priori classification. Once the clusters were identified, the literature was examined to explain the substantive issues represented within each cluster, illustrate their main themes, and identify areas of convergence and omission in the field (Dabić et al., 2020; van Eck and Waltman, 2007; Tranfield et al., 2003).

In this cluster, the individual characteristics of immigrant entrepreneurs, including nationality and gender, are highlighted. Despite informal entrepreneurship being most prevalent in developing nations, there is little evidence of its connection to migrant entrepreneurship in both developed and developing countries (Muñoz-Mora et al., 2022). The undocumented Hispanic population in the United States is largely responsible for the increase in self-employment rates among Hispanic immigrants, with informal self-employment more likely among Hispanic women than those in formal self-employment (Mindes and Lewin, 2024; Wang and Wang, 2025).

Compared to their male counterparts, female immigrants are less likely to launch and manage their own companies, while a supportive entrepreneurial environment encourages female immigrant entrepreneurship (Morales et al., 2022). Diverse factors such as language, whiteness, country of origin, and motherhood shape the unequal power dynamics in which migrant women establish their businesses (Gomez et al., 2024; Naldi et al., 2021; Webster and Haandrikman, 2022).

Women migrant entrepreneurs reconcile and manage their identities to conform to social and cultural norms in both their home and host countries (Chitac, 2025). However, the likelihood of self-employment among female immigrants is more influenced by their immigrant identity than by their gender identity, relative to their financial, social, and human capital (Chitac, 2025). They feel empowered as entrepreneurs in the host nation, but in their patriarchal home countries, their entrepreneurial identity is suppressed, contradicting established sociocultural roles (Chitac, 2025). Although ethnicity has often been viewed negatively in immigrant entrepreneurship, it can be an asset, particularly in sectors such as restaurants (Evansluong et al., 2025).

This cluster examines how finance, networks, and individual characteristics shape immigrant entrepreneurs' business performance. Immigrants often face difficulties accessing financial resources, but mobilising home-country networks through crowdfunding enables fundraising performance comparable to that of native-born entrepreneurs (Butticè and Useche, 2022). Immigrants are more “job creators” than “job takers” in developed countries, and foreign-born founders are central to high-growth entrepreneurship in the USA (Azoulay et al., 2022).

Compared to native-owned businesses, immigrant-owned firms in the USA employ fewer people, pay similarly, offer fewer benefits, but are more present in prominent tech clusters and engage more internationally (Kerr and Kerr, 2020). Reliance on domestic ethnic ties can limit growth, whereas performance is positively associated with international links (Brzozowski and Cucculelli, 2020). Ethnic enclaves can also provide benefits: access to an “acquainted mentor” and social capital from first-wave entrepreneurs can support the establishment, survival, and expansion of later-wave immigrant enterprises (Yasin and Hafeez, 2023).

Individual characteristics such as education further influence performance. International students in higher education in developed countries contribute significantly to venture capital-backed entrepreneurship, showing the role of universities in attracting entrepreneurial talent and fostering growth (Amornsiripanitch et al., 2023). Immigrant entrepreneurs with prior business experience in their home countries and higher education obtained in the host country are more likely to develop transnational relationships (Brzozowski and Cucculelli, 2020).

This cluster focusses on entrepreneurial motivation and integration, particularly among refugees forced to immigrate and often establish their own businesses in the host country. Literature on migrant and refugee entrepreneurship is often informed by the mixed embeddedness theory, which considers the entrepreneur's personal social (co-ethnic) network and regional contextual elements, such as the institutional environment and local markets (Meister and Mauer, 2019). Even though entrepreneurship is frequently promoted as a means of facilitating immigrant integration in several host nations, only a small percentage of refugees, mostly those with the necessary skills, successfully integrate through entrepreneurship (Refai et al., 2024). Tensions between local people and refugees are heightened by cultural differences and their prolonged stay (Yetkin and Tunçalp, 2024). Still, business incubation helps refugee entrepreneurs integrate into their host communities (Meister and Mauer, 2019).

In terms of market conditions, the educational environment, discontent, and expertise, the entrepreneurial motivations of refugees vary throughout host nations (Zalkat et al., 2024). Nevertheless, refugee entrepreneurs are driven by comparable views of social contexts and cultural norms and exhibit comparable degrees of entrepreneurial ambition and attitude, regardless of their host nation (Zalkat et al., 2024). Refugees who are willing to launch a new company may be driven by the desire to make a living in the industry they were previously employed in back home (Alexandre et al., 2019). Although refugee entrepreneurs can assimilate more easily and form social relationships when they share some cultural values with natives, such as language and food, the challenges appear to be related to administrative, financial, and local policy issues (Alexandre et al., 2019).

Beyond the individual cluster descriptions, three broader patterns emerged from the review. First, immigrant entrepreneurship should be treated as a multi-level phenomenon, in which entrepreneur-level attributes, firm-level dynamics, and wider institutional or social conditions are closely intertwined rather than analytically separable (Dabić et al., 2020). Second, networks and embeddedness appear as cross-cutting mechanisms across the three clusters: they shape access to resources, opportunity recognition, performance, and processes of social and economic integration. Third, although the literature has developed considerably, it remains weakly comparative in spatial terms, with only limited attention to how immigrant entrepreneurship may differ across rural and urban settings. This final pattern is especially significant because it connects the three clusters to a shared gap in the literature, thereby supporting the comparative design of Study 2 (Mindes and Lewin, 2024; Morgan et al., 2021; Yetkin and Tunçalp, 2024).

The research gaps were identified through analysis of the three clusters. After identifying the thematic concentrations in the co-occurrence map, we examined the studies within each cluster to determine where the literature remained conceptually narrow, empirically underdeveloped, or insufficiently comparative. Analysing the three thematic clusters, we identified the lack of comparative studies about immigrant entrepreneurship in rural and urban contexts.

More studies should examine the individual characteristics of immigrant entrepreneurs, including nationality and country of origin (Wang and Wang, 2025), in both rural and urban contexts. While educational attainment is often used in the immigrant entrepreneurship literature to measure human capital, other factors such as industry and entrepreneurial experience may also be relevant components of human capital (Gomez et al., 2024). Despite their contributions to the economies of their host countries, self-employed female immigrants have received little attention in the literature (Bedi and Jia, 2024; Gomez et al., 2024; Mindes and Lewin, 2024). The marital status of female immigrant entrepreneurs should also be analysed in future studies (Naldi et al., 2021).

Regarding business performance, it is also essential to examine various immigration groups and national settings (Yasin and Hafeez, 2023), which vary in terms of institutional and social support for immigrants (Morgan et al., 2021), as observed in both rural and urban contexts. More research should compare the pay and benefits of jobs created by immigrant-owned businesses, as immigrant owners may exhibit distinct employment adjustment patterns for their domestic immigrant workforce (Kerr and Kerr, 2020).

In the area of entrepreneurial motivation and integration, more studies could analyse other groups of immigrants besides refugees (Yetkin and Tunçalp, 2024), in rural and urban settings. Future studies should investigate specific institutional and policy differences among nations or regions and evaluate how these influence the outcomes and motivations of immigrant entrepreneurs (Zalkat et al., 2024). Additionally, the integration mechanisms of immigrant entrepreneurs may differ in rural and urban areas.

The gaps identified in Study 1 provided the direct rationale for Study 2, which was designed as a comparative, multi-level qualitative study of immigrant entrepreneurs in rural and urban Portugal. The three clusters were translated into the qualitative study through a multi-level research design: individual characteristics, drawn directly from the first cluster; business characteristics and contextual environment, which deepen the concerns identified in the business performance cluster; and opportunity versus necessity, which operationalises the motivation and integration cluster in a way that is analytically comparable across rural and urban settings. This explains why the aggregate dimensions in the Gioia-based data structure do not match the bibliometric clusters. Study 2 was designed not merely to replicate the literature map, but to refine and deepen it through primary empirical evidence (Gioia et al., 2013).

Study 2 is the empirical extension of Study 1. This design choice enabled the article to move from broad thematic clustering to a more explanatory framework, showing that immigrant entrepreneurial trajectories are shaped by the intersection of motivational drivers and rural–urban context. More details about the SLR findings see in Figure 3.

Portugal is selected as the empirical context because it ranks tenth among OECD countries in the growth rate of permanent migration since 2019 (OECD, 2025). Immigrants in Portugal are substantially more likely to be self-employed than native-born residents (+3 to 4% points) (OECD, 2024). Over the past 4 decades, their entrepreneurial activity has expanded in line with broader European trends, with foreign-owned businesses increasingly contributing to the Portuguese economy, particularly through job creation (Oliveira, 2023).

Portugal's migrant legislation is among the most advanced and inclusive in Europe, with MIPEX ranking the country in the top ten for migrant integration across 56 countries, and Portugal being one of only five countries worldwide that grant migrants full and immediate access to entrepreneurship (Solano and Huddleston, 2020; Solano, 2021). In Portugal, the urban and rural contexts present distinct conditions for immigrants to develop their entrepreneurial activity (Torkington et al., 2025).

This study employed a qualitative methodology to provide a comprehensive understanding of immigrant entrepreneurship in Portugal. The qualitative component focussed on capturing personal narratives and individual experiences, with interviews conducted in Portuguese and English. Oral consent was obtained from all participants, and anonymity was ensured using coded identifiers. All interviews were transcribed, translated as necessary, and manually analysed using a content analysis.

Drawing on the findings from the systematic literature review, the interviews and focus groups explored three key research areas: (1) individual characteristics, (2) business performance, and (3) entrepreneurial motivations. We designed a comprehensive thematic interview guide with semi-structured questions that structured the discussions around these clusters, combining targeted and open-ended items to invite participants to expand on emerging issues and contextual experiences (Blackburn et al., 2023). The guide used for the focus groups followed the same structure but adapted the questions to suit the participants' specific knowledge as gatekeepers of the immigrant population. For example, participants explained how their previous professional background shaped the creation of their business (Individual Characteristics), described their business type and customers (Business Performance), and reflected on the opportunities and barriers of operating in the region (Entrepreneurial Motivation).

Additionally, relevant background data (Table 1) were collected from the webpages of the National Statistical Institute, the Migration Observatory, the European Union Action Plan on Integration and Inclusion 2021–2027, OECD International Migration Outlook and the Migrant Integration Policy Index (MIPEX) to contextualise and triangulate the qualitative findings.

By integrating qualitative data collection and secondary data analysis, this methodology enabled a richer, context-sensitive understanding of the factors shaping immigrant entrepreneurship in both rural and urban Portugal, allowing for robust triangulation of insights across multiple sources. In April 2025, we conducted 20 semi-structured interviews with immigrant entrepreneurs, 10 in rural areas and 10 in urban contexts (Table 2), alongside two focus groups. Drawing on the latest OECD indicators, our sample includes participants from 13 countries, seven of which are among the top 15 countries of birth of residents and recent inflows to Portugal in 2023, thus reflecting the main origins of immigrants in the country (OECD, 2025).

We used snowball sampling as a non-probability technique, combining initial contacts with leaders of migrant associations from the main nationalities (primarily from Global South countries) and informal gatekeepers in urban and rural areas (local mediators and individuals spanning different immigrant populations) to reach hard-to-access migrant entrepreneurs and build trust-based referral chains (Beauchemin and González-Ferrer, 2011). Table 2 below summarises their demographic, educational, and business characteristics, reflecting the three previously discussed clusters and providing a clearer understanding of participants' profiles.

The focus groups included one with rural immigrant intercultural mediators and another with urban directors of immigrant associations (Table 3). Interviews and focus groups were conducted either in person or via Zoom, depending on participant availability and preference (Chee, 2025).

To enhance the rigour of Study 2, the methodology was refined by focussing on triangulation, data saturation, and researcher reflexivity. The study employed an iterative process of discovery, assessment, and sifting to ensure rigour (Buchnea and Wong, 2026). This cycle was repeated until data saturation was achieved, meaning the process continued until the most comprehensive understanding of rural and urban immigrant trajectories was reached while accounting for data limitations. Reliability was further strengthened through triangulation, where primary interview and focus group data were cross-checked and validated against secondary institutional records and statistical materials (Buchnea and Wong, 2026).

The researchers adopted an intersectional reflexivity lens to examine how knowledge is co-constructed through the interaction of social categories of difference (Rodriguez and Ridgway, 2023). This approach required constant scrutiny of how the researchers' own identities (such as nationality, gender, and academic status) mobilised instances of both privilege and disadvantage during interviews and focus groups.

This study employed a grounded theory approach (Gioia et al., 2013), for data analysis. After transcription and, where necessary, translation, the interview and focus group materials were read several times and coded iteratively. To identify new themes related to rural and urban immigrant entrepreneurship during the thematic analysis phase, the analysis was conducted in multiple phases, ensuring that newly emerging categories and insights were continuously integrated.

The first phase involved open coding (1st-order concepts), in which the data were examined line by line, assigning codes to each distinct piece of information. This process facilitated the segmentation of data into manageable components, enabling the identification of distinct concepts. Analysis of interview data revealed a broad range of themes related to immigrant entrepreneurship (2nd-order themes). After the second order, themes focussed on selective coding, to establish conceptual connections among themes and organise them into broader dimensions (aggregate dimensions) to build a theoretical framework. Four fundamental categories were identified (Figure 4).

Concerning entrepreneurial motivations, they were coded by distinguishing between push factors associated with opportunity entrepreneurs (e.g. financial pressure, lack of employment alternatives) and pull factors associated with necessity entrepreneurs (e.g. autonomy, lifestyle aspirations), consistent with prior literature (Estrin et al., 2024; Hessels et al., 2008). Cases were iteratively compared across the dataset, and classifications were refined through discussions within the research team to ensure consistency. For participants with mixed motivations, categorisation was based on the dominant driver shaping the entrepreneurial trajectory, acknowledging the coexistence of hybrid motives (Estrin et al., 2024).

In this section, we present empirical findings on immigrant entrepreneurs in Portugal, comparing similarities and differences between rural and urban contexts. Our results are organised into four main dimensions based on the structure data: contextual environment, business characteristics, individual characteristics, and opportunity versus necessity.

The contextual environment for immigrant entrepreneurship encompasses the economic environment, policies, social, cultural, and physical conditions. Regarding the economic environment, rural areas attract immigrant entrepreneurs with cheaper rents and lower living costs, making it easier to establish businesses. Conversely, rents are generally much higher in urban areas, particularly in Lisbon. Nevertheless, entrepreneurs with experience in other European countries often choose Lisbon because its costs are lower than in cities such as Amsterdam.

Concerning policies, the main issues identified by both rural and urban entrepreneurs include entrepreneurial support mechanisms, training programs, bureaucracy and legislation. Bureaucracy and legal requirements are consistently viewed as negative factors. In rural areas, there tend to be more incentives for immigrants due to population decline and the need to attract new residents and businesses. However, opinions regarding support mechanisms and training programs are mixed. Some immigrants report insufficient information about available resources, while others believe it is simply a matter of seeking the most appropriate programs. Safety is frequently highlighted as a positive aspect in rural and urban contexts.

The social and cultural conditions influencing both rural and urban immigrant entrepreneurship are cultural differences, which are faced as important obstacles to developing their businesses. Notably, factors related to raising children were significant only for rural entrepreneurs; this consideration did not emerge as crucial among their urban counterparts. Social events facilitate business connections, particularly in rural contexts where close-knit population mean that “everyone knows everyone.”

Physical conditions referenced by rural and urban immigrant entrepreneurs include the region's natural environment, geographical location, and accessibility. While the beauty of the landscape is appreciated in both contexts, the specific natural conditions differ. In rural areas, cold weather and low pollution are often highlighted, whereas favourable weather is considered an advantage in urban areas. Interestingly, cold weather in rural regions can motivate some entrepreneurs to relocate to nearby coastal cities, such as Lisbon.

The city's size is mentioned in both contexts. In rural areas, it can be perceived as either a positive or a negative factor for entrepreneurial activity, depending on the individual entrepreneur. In contrast, city size is consistently seen as advantageous in urban areas, as it provides access to a larger customer base.

Secondary data from the National Statistics, Migration Observatory, OECD, and European Commission webpages support this information. The European Union's strategy, Action Plan on Integration and Inclusion 2021–2027, (European Commission, 2020) recognises entrepreneurship as a key driver for migrant integration and regional development. Portugal's legislation stands out for permitting and facilitating immigrant entrepreneurship, including for non-EU nationals, through specific residence permits and supportive programmes, such as the Startup Visa and the D2 Visa for entrepreneurs, as well as other residence permits that provide clear legal pathways for self-employment and business creation. These measures are complemented by attractive tax regimes and access to national and EU funding, making Portugal a leading destination for immigrant entrepreneurs.

The businesses established by immigrant entrepreneurs can be analysed across several dimensions: industry characteristics, business networks, and business performance. Industry characteristics play a crucial role in promoting immigrant entrepreneurship in both rural and urban contexts. These include the creation of new types of businesses, the level of business competition, the nature of the customer base (such as seasonal or multicultural customers), and access to international suppliers. Many immigrants introduce novel business concepts in both contexts.

However, in rural areas, public bodies often do not immediately understand these new ventures. Once implemented, such businesses frequently succeed, as their novelty generates curiosity and interest in the rural region. The degree of competition can promote or restrict entrepreneurial activity, depending on the sector and context. Serving a diverse range of customers, including those from seasonal and multicultural backgrounds, is common in rural and urban settings. Access to international suppliers is crucial for gaining a competitive advantage for certain types of businesses, particularly in rural areas where product diversity is limited.

Business networks, with other immigrants and local organisations, are essential for developing entrepreneurial activity in rural and urban contexts. Digital networks are more prevalent in urban areas, but they also play a significant role in overcoming geographical and operational barriers in rural areas.

Immigrant entrepreneurs are also concerned with business performance, which can be assessed using indicators such as sales, job creation, and business expansion. While some immigrant entrepreneurs generate employment opportunities, those in rural areas often face greater difficulties finding specialised workers. Most entrepreneurs intend to expand their businesses, whether through diversification or opening new establishments.

Individual characteristics of immigrant entrepreneurs can be analysed through their personal and social networks, professional experience, and demographic attributes. Personal and social networks encompass connections with family and friends, those within the local population and the level of local integration. Almost all immigrant entrepreneurs report feeling well integrated into rural or urban populations, having established networks with local residents, although some cultural differences persist.

In urban contexts, some immigrants experienced greater initial difficulties integrating. Family and friends play a crucial role in providing support in rural areas, particularly in financial and administrative matters. Previous professional experience is a key characteristic of immigrant entrepreneurs, as all interviewees had at least some prior entrepreneurial or industry-specific experience.

Regarding demographic characteristics, immigrant entrepreneurs include language, marital status, education level, and age. Most immigrants interviewed from Portuguese-speaking countries, such as Brazil, report that sharing the same language is a significant advantage. In contrast, others, such as Indian immigrants, face considerable difficulties running their businesses without proficiency in Portuguese, especially in rural areas where options are fewer, including Portuguese-language courses.

Marital status is particularly significant for married women in rural areas, as many relocated because their husbands accepted job offers in the region. A high level of education is also considered fundamental for establishing businesses in rural and urban contexts. Age can influence the type of business chosen, especially in rural areas, where older entrepreneurs tend to select less physically demanding ventures.

Most immigrant entrepreneurs interviewed are opportunity-motivated rather than necessity-motivated in rural and urban contexts. Immigrant entrepreneurs have financial and self-oriented motives, such as the desire for independence and a particular lifestyle with a high quality of life. Both types of entrepreneurs are drawn to a rural or urban region, but for fundamentally different reasons and with distinct trajectories shaped by their circumstances and resources.

The types of opportunities vary by context. Given the lower product and service diversity in the rural context, there are several opportunities to explore new businesses in the region, such as Pilates studios with equipment, the importation of Brazilian products publicised by Brazilian influencers on social media, cultural spaces, or alternative therapies.

In the urban context, one interviewee and her husband recognised the potential in Lisbon's property market, observing that many old buildings needed renovation. Their motivation stemmed not from tax incentives but from a desire to seize a promising business opportunity and fundamentally change their lives. Their backgrounds – hers in the arts, his in business – enabled them to mobilise capital, such as selling their house in France, and invest in a new venture. Such entrepreneurs typically have some capital to invest and are drawn to urban centres by the scale and diversity of the market, rather than by necessity.

In contrast, necessity entrepreneurs in rural and urban settings are often propelled into business ownership by a lack of viable alternatives. Their narratives reveal a different approach in each context, shaped by personal or economic circumstances. Necessity immigrant entrepreneurs in the rural areas adapt to shifts in the economic and social environment of those areas without a clearly defined strategy, modifying their activities as needed to remain viable in a changing market.

In the urban context, one interviewee described her transition from hotel cleaning, which she left due to severe back pain and a lack of childcare options on weekends. Without access to unemployment benefits, they sought training and support programs and eventually launched their own business with the assistance of mentors. The challenges faced by necessity entrepreneurs are compounded by structural barriers in the urban context, such as high rents and limited access to bank credit, which inhibit their ability to expand or formalise their businesses.

The results of this study are theoretically supported by the mixed embeddedness perspective and the opportunity–necessity motivation. The mixed embeddedness suggests that entrepreneurial behaviour emerges from the interplay between the entrepreneur's individual social network and regional contextual factors, such as the institutional framework and the characteristics of local markets (Meister and Mauer, 2019). This approach moves beyond earlier models that focussed solely on cultural or structural explanations, offering a more nuanced understanding of how immigrants create and sustain businesses in diverse settings (Högberg and Mitchell, 2023), particularly in rural and urban contexts.

The reasons behind an immigrant starting a business are generally varied and need to be examined in light of other factors, such as the overall reasons for migration and migration strategies (Dabić et al., 2020; Porfírio et al., 2024), particularly in rural and urban contexts. Urban areas offer higher diversity and accessible resources, but foster intense competition (Bird and Wennberg, 2016). Conversely, rural regions provide unique structural holes where immigrants can occupy niches vacated by native residents (Boyd, 2013). The terminology of entrepreneurial motivation may vary, although “opportunity” and “necessity” entrepreneurship are the most commonly used terms in the entrepreneurship literature (Estrin et al., 2024; Gelderen et al., 2005). Entrepreneurial motivation can influence the way an entrepreneur manages their business and, consequently, their performance (Hessels et al., 2008).

Based on our results, we have developed a framework (Figure 5) that intersects entrepreneurial motivation (Opportunity vs Necessity) with Context (Rural vs Urban). We identified a new entrepreneur typology that comprises four types: (1) Pioneers (Rural-Opportunity); (2) Reactors (Rural-Necessity); (3) Vanguards (Urban-Opportunity); and (4) Survivors (Urban-Necessity).

Table B (in supplementary material) illustrates the excerpts for these four types of immigrant entrepreneurs. Pioneers (RP1, RP3, RP5, RP6, RP7, RP9, RP10) are immigrant entrepreneurs who seek new opportunities in rural contexts by introducing innovations in products or services that meet the specific needs of rural populations. Pioneers emphasise the goals of the entrepreneur's family, including job and family satisfaction, or a desire for a quiet life (Hansson et al., 2013), particularly in rural areas, where this can be characterised as lifestyle entrepreneurship. Their opportunity recognition is mediated by spatial and cultural embeddedness, where they leverage the cultural or historical heritage of a rural place to create innovative lifestyle niches (Boyd, 2013; Korsgaard et al., 2015; Yetkin and Tunçalp, 2024). Resource mobilisation relies heavily on family and social embeddedness, utilising unpaid labour and family resource bundles to minimise risks and pursue personal dreams in less competitive markets (Bird and Wennberg, 2016; Bizri, 2017; Tata and Prasad, 2015). For Pioneers, the empirical evidence highlights opportunity-driven entrepreneurs who identify unmet needs in rural areas and introduce innovative products or services aligned with lifestyle and family-oriented goals. This directly supports the research Proposition 1 (P1).

Reactors (RP2, RP4, RP8) are immigrant entrepreneurs who respond to changes in rural areas' economic and social environment, lacking a clear strategy. They adjust their operations as necessary to survive in an ever-changing market. Their opportunity recognition is mediated by institutional embeddedness, as they often lack formal support and host-country information (Harima, 2022a; Yetkin and Tunçalp, 2024) in rural areas. They rely on basic co-ethnic network embeddedness, using close-knit survival ties to adjust to economic shifts without a proactive long-term strategy (Kushnirovich et al., 2018; Yetkin and Tunçalp, 2024). For Reactors, the data reveal adaptive and reactive behaviours in response to constrained rural environments, where entrepreneurs adjust their activities incrementally to sustain their businesses. These patterns provide clear empirical grounding for Proposition 2 (P2).

Vanguards (UP1, UP2, UP6, UP7, UP8, UP9, UP10) are immigrant entrepreneurs who identify and seize market opportunities in urban areas, possessing the resources or backgrounds necessary to act on them. They are motivated by self-oriented aims, such as independence, challenge, and autonomy, and fuelled by the desire for recognition. Vanguards are proactive and strive to expand their businesses by innovating and exploring new trends and demands within the urban market. Their opportunity recognition is mediated by cognitive and transnational embeddedness, allowing them to navigate complex market dynamics and high-growth trends in dense urban markets (Choi et al., 2024; Kabbara and Zucchella, 2023; Li et al., 2023). Resource mobilisation is mediated by structural embeddedness, where they build “weak ties” and professional connections beyond co-ethnic enclaves to achieve “breakout” success (Morgan et al., 2021; Onyima et al., 2024). Vanguards highlight innovation, growth orientation, and self-driven motivations in resource-rich environments, underpinning Proposition 3 (P3).

Survivors (UP3, UP4, UP5) are immigrant entrepreneurs who establish businesses due to a lack of employment opportunities in urban settings. They are motivated by the need to secure a livelihood and often seek out market niches where they can survive. Institutional and social constraints mediate the opportunity recognition. Survivors are motivated by urban unemployment, and recognise openings in low-threshold, labour-intensive sectors (Azmat and Fujimoto, 2016; Kloosterman, 2010). They depend heavily on relational embeddedness, mobilising co-ethnic resources such as cheap labour and informal credit, to mitigate high urban-entry risks and exploit “vacancy-chain openings” abandoned by indigenous owners in low-value sectors (Bird and Wennberg, 2016; Wang and Warn, 2018). For Survivors, the quotes illustrate necessity-driven entry into low-threshold sectors, shaped by employment constraints and structural barriers in urban contexts. These empirical insights directly support Proposition 4 (P4).

Rather than a mere background, the spatial context (rural vs urban) acts as a filter that determines which forms of embeddedness are activated to support opportunity recognition and resource mobilisation (Kloosterman, 2010), leading to distinct entrepreneurial trajectories. In rural contexts, lower entry barriers, limited formal support structures, and stronger community cohesion amplify the importance of social and cultural embeddedness, privileging family-based resources, local trust, and place-specific knowledge (Bird and Wennberg, 2016; Korsgaard et al., 2015). This explains why opportunity-driven Pioneers mobilise spatial and cultural embeddedness to create niche, lifestyle-oriented ventures by blending personal satisfaction with local heritage, while necessity-driven Reactors rely on co-ethnic and local ties, and adjust operations merely to survive institutional marginalisation (Boyd, 2013; Harima, 2022a; Soydas and Aleti, 2015).

Urban environments, characterised by high-growth segments, higher competition, diversified markets, and more complex regulatory frameworks, enhance the role of institutional and structural embeddedness, privileging access to formal institutions, weak ties, and transnational networks (Kloosterman, 2010; Morgan et al., 2021). In this setting, opportunity-driven Vanguards leverage cognitive, structural, and transnational embeddedness to access high-growth opportunities, whereas necessity-driven Survivors depend on relational embeddedness within co-ethnic networks to navigate constrained labour markets and low-threshold sectors (Azmat and Fujimoto, 2016; Wang and Warn, 2018). Typical necessity entrepreneurship is often associated with a lack of job opportunities (Bedi and Jia, 2024), although Survivors are specifically embedded in urban “vacancy-chain” openings, as low-value sectors like catering or retail are devalued by indigenous owners (Kloosterman, 2010; Wang and Warn, 2018).

This typology distinguishes itself from existing models by using spatial context (rural vs. urban) as a primary defining variable, a dimension often overlooked in mainstream models about immigrant entrepreneurship (Gurău et al., 2020). It advances beyond existing models by explicitly intersecting entrepreneurial motivation with spatial context, addressing limitations in traditional unifocal approaches (Onyima et al., 2024). It demonstrates how identical motivations (Opportunity vs. Necessity) produce distinct strategies depending on the spatial opportunity structure and the nature of the entrepreneur's embeddedness (Sequeira et al., 2009; Storti, 2014). Pioneers are faced as lifestyle entrepreneurs as they are explicitly bounded to the rural opportunity structure (Korsgaard et al., 2015) distinguishing them from Vanguards, who prioritise growth and professional recognition in urban areas.

Existing literature identifies a binary between necessity and opportunity but it frequently neglects how location dictates survival (Bedi and Jia, 2024). Although previous work has explored immigrant entrepreneurship driven by opportunity and necessity, it has not focussed on rural and urban regions (Bedi and Jia, 2024; Porfírio et al., 2024). This approach reveals that spatial context is not just a setting but a dynamic mechanism that activates or devalues specific immigrant resources.

The framework presented in Figure 6 illustrates the complex, multi-level process through which immigrant entrepreneurial trajectories are formed, organised around an antecedents-typology-outcomes logic. The process begins with three primary antecedents: the contextual environment, the entrepreneur's individual characteristics, and the business characteristics. These antecedents feed into the central typology, defined by the intersection of spatial context (rural vs urban) and entrepreneurial motivation (opportunity vs necessity), which generates the four typological profiles: Pioneers, Reactors, Vanguards, and Survivors. Each type reflects a distinct configuration of embeddedness and strategic behaviour. The outcomes show how these configurations translate into different entrepreneurial trajectories, such as lifestyle venture creation, adaptive continuity, business expansion, or persistence in low-value niches.

Our research has several important theoretical implications for the field of immigrant entrepreneurship. First, this study advances immigrant entrepreneurship research by addressing the limited integration of spatial context and entrepreneurial motivation. While prior work emphasises individual and contextual factors (Dabić et al., 2020) and the interaction between resources and opportunity structures (Kloosterman, 2010), our findings show that rural–urban contexts systematically shape these dynamics, responding to calls for more context-sensitive approaches (Evansluong et al., 2025). This confirms that immigrant entrepreneurship is shaped by complex and interrelated factors that cannot be adequately captured through single-level analyses (Dabić et al., 2020).

Second, the study refines the necessity–opportunity distinction by demonstrating that motivations are context-dependent. Although prior research highlights their influence on entrepreneurial behaviour (Estrin et al., 2024; Hessels et al., 2008), our results show that the same motivation leads to different strategies and outcomes across rural and urban settings, highlighting the role of spatially conditioned opportunity structures. While useful, the distinction between necessity and opportunity entrepreneurship is insufficient without considering the spatial and contextual factors mediating entrepreneurial trajectories.

Third, the study contributes by advancing the concept of spatial embeddedness (Granovetter, 1985; Korsgaard et al., 2015) as a dynamic mechanism that reorders the importance of social, cultural, and institutional embeddedness. This extends mixed embeddedness theory by clarifying how embeddedness operates differently across spatial contexts (Kloosterman, 2010).

Finally, the proposed typology integrates spatial context and motivation into a unified framework, addressing limitations in prior unidimensional approaches and providing a basis for future comparative research (Dabić et al., 2020; Gurău et al., 2020).

The empirical findings offer fundamental practical contributions for organisations that support immigrant entrepreneurship, demanding stratified and context-sensitive interventions. First, the geographical differentiation of capacity-building strategies emerges as a theoretical and practical imperative. The rural and urban ecosystems require distinct approaches (Jack and Anderson, 2002). The evidence in rural areas (Wen et al., 2024; Zhu et al., 2025) suggests that entrepreneurial programs should prioritise the management of community-based networks, microcredit with collective guarantees, and integration into local value chains, such as cultural tourism or agri-food sectors. In these settings, interventions should build on place-specific intangible assets, such as artisanal traditions and local cultural identities, while addressing structural gaps, like the absence of specialised rural incubators or extension services, through prior territorial diagnostics and participatory mapping (Solano, 2021).

Second, the stratification of support according to motivational profiles reveals the inadequacy of homogeneous models. For necessity-driven entrepreneurs, stabilising interventions, such as basic financial literacy, legal mediation, and partnerships for complementary income generation, are critical to reducing initial vulnerabilities (Desa and Basu, 2013). In contrast, opportunity-driven entrepreneurs benefit from expansion-oriented programs, including mentoring in intellectual property, access to prototyping labs, and integration into transnational diaspora networks (Schmutzler et al., 2019; Wen et al., 2024). This duality reinforces the theoretical typology proposed by Block et al. (2017).

Third, intercultural mediation in mentoring programs emerges as a structuring axis. Drawing on Bourdieu's theory of cultural capital (Bourdieu, 1986), it is essential to train mentors in intercultural competencies, such as literacy in ethnic business practices and non-verbal communication techniques. At the same time, mechanisms for co-producing knowledge, such as policy co-design labs with community leaders and multilingual digital platforms, help overcome language barriers and power asymmetries (Komatsu et al., 2021). An effective implementation requires tripartite cooperation between governments, academia, and immigrant associations, ensuring both sustainability and measurable impact on entrepreneurial trajectories (Dabić et al., 2020).

Ensuring that robust legal provisions for immigrant entrepreneurship are matched by timely and effective implementation remains a persistent challenge in many countries. Evidence shows that migrant entrepreneurs frequently encounter procedural delays and information asymmetries, which limit their ability to start or scale businesses (OECD, 2023; Solano, 2021). To address this, policymakers should enforce processing deadlines and introduce accountability mechanisms such as penalties for administrative delays, as these have been shown to reduce bureaucratic barriers that hinder business creation among migrants (Solano, 2021). Empirical findings indicate that predictable timelines and transparent status updates increase migrants' trust in institutions and willingness to formalise their ventures.

Another key recommendation is the adoption of regulatory innovations such as the principle of“tacit approval”, where applications are automatically approved if not processed within a legal timeframe. This mechanism is internationally recognised as an effective tool for reducing uncertainty and administrative inertia (Harima, 2022b). Our findings show that migrant entrepreneurs perceive such uncertainty as a major deterrent, especially in rural areas where service access is already limited.

Comprehensive training initiatives, including specific modules on entrepreneurship and intercultural competence, are critical for equipping both migrants and the support professionals to navigate business and institutional contexts (Cadenas et al., 2023). Our findings reinforce that intercultural misalignment between service providers and migrant entrepreneurs often leads to misunderstandings and under-use of support schemes. Implementation barriers include limited funding for training, high staff turnover, and the need for ongoing curriculum adaptation to diverse migrant profiles.

Finally, there is a broad consensus that “one size fits all” approaches are ineffective. Interventions must be adapted to local contexts, taking into account the specific needs, resources, and challenges faced by migrant entrepreneurs in different territories (Barrett and Vershinina, 2017; Solano, 2021). Our findings show that rural and urban immigrant entrepreneurs face distinct constraints, ranging from isolation and transport barriers in rural areas to intense competition and high costs in urban centres. Contextual limits such as decentralised governance structures, uneven regional funding, and scarce multilingual staff may further complicate the design of place-sensitive policies. By combining regulatory enforcement, administrative simplification, targeted incentives, comprehensive training, and locally embedded support networks, policymakers can reduce the gap between policy and practice and unlock the potential of migrant entrepreneurship as a driver of inclusive regional development.

This study employed a mixed-methods approach to examine how rural–urban contexts intersect with necessity–opportunity motivations in shaping immigrant entrepreneurial trajectories in Portugal. By integrating a systematic literature review with a qualitative study, it advances a multi-level understanding of immigrant entrepreneurship, structured around individual characteristics, business dynamics, and motivational drivers.

The study proposes a typology of immigrant entrepreneurs (Pioneers, Reactors, Vanguards, and Survivors) that captures the intersection of spatial context and motivation. This typology shows how different configurations of embeddedness generate distinct entrepreneurial strategies and outcomes, ranging from local niche creation to growth-oriented expansion or subsistence activities. The study contributes to the literature by integrating spatial and motivational dimensions into a unified analytical framework, addressing the limited comparative perspective between rural and urban contexts identified in prior studies (Evansluong et al., 2025; Dabić et al., 2020), and by demonstrating the value of mixed-methods designs in capturing the complexity of immigrant entrepreneurial trajectories.

Addressing the first research question, the findings show that spatial context and entrepreneurial motivation interact in a configurational manner. Rural environments, characterised by lower costs and stronger community ties, enable opportunity-driven entrepreneurs to identify niche markets and develop lifestyle-oriented ventures. At the same time, necessity-driven actors adopt adaptive strategies to cope with limited alternatives. In contrast, urban contexts, with larger markets and higher competition, support opportunity-driven entrepreneurs in pursuing innovation and growth. In contrast, necessity-driven entrepreneurs are concentrated in low-threshold activities shaped by structural constraints. These results confirm that similar motivations lead to distinct entrepreneurial trajectories depending on the spatial opportunity structure (Estrin et al., 2024; Hessels et al., 2008; Kloosterman, 2010).

Regarding the second research question, the study identifies distinct configurations of embeddedness across the four entrepreneurial types. In rural contexts, Pioneers (opportunity-driven) rely on spatial and cultural embeddedness to exploit local niches, whereas Reactors (necessity-driven) depend on limited institutional and co-ethnic ties and adopt adaptive strategies in resource-constrained environments (Korsgaard et al., 2015). In urban settings, Vanguards (opportunity-driven) mobilise structural and transnational embeddedness to pursue innovation and growth through diversified networks (Morgan et al., 2021). In contrast, Survivors (necessity-driven) rely on relational co-ethnic embeddedness, which facilitates entry but confines them to low-threshold, highly competitive sectors (Wang and Warn, 2018). These findings extend mixed embeddedness theory by showing that embeddedness is dynamically shaped by both spatial context and entrepreneurial motivation (Dabić et al., 2020).

Future research should extend this framework through longitudinal and comparative studies across different national and regional contexts to examine how these dynamics evolve. It should also incorporate more diverse immigrant groups, as the predominance of Brazilian entrepreneurs in the rural sample may shape patterns of integration and access to resources (Brzozowski and Cucculelli, 2020; Dabić et al., 2020), even if this reflects current migration trends in Portugal.

The supplementary material for this article can be found online.