Entrepreneurship theories and the relationship between refugee inflows and the host countries’ entrepreneurial rates
| Factors | Theory | Proponents (authors/ studies) | Mechanisms that support/explain the entrepreneurship rates | The entrepreneurial propensity of refugees versus native individuals | Expected impact of refugee inflows on the host country’s entrepreneurship rate |
|---|---|---|---|---|---|
| Psychological | Humanistic psychology | O’Donnell et al. (2020) | Life stability is related to entrepreneurship. Countries with more middle-aged people with a more stable lifestyle are expected to have a higher rate of entrepreneurship | Higher for Natives | Negative |
| Planned behavior | Cognitive psychology theory | Van Ness and Seifert (2016) | People with an openness to experience, self-reliance and emotional stability characteristics tend to have a higher entrepreneurship rate. Hence, having more people with lower emotional stability in a country tends to decrease the entrepreneurship rate | Higher for Natives | Negative | |
| Shackle’s theory | Lachmann (1976) | An entrepreneur is a risk-taker, a person who can decide in uncertain and dynamic environments. As refugees have a high level of risk-taking behavior, an increase in their inflows would increase the entrepreneurship rate of host countries | Higher for Refugees | Positive | |
| Economic | Casson’s theory | Casson (2005) | Countries with more transparency and easier access to financial and information resources tend to have a higher entrepreneurship rate. However, natives benefit more due to their knowledge about the market and available information | Higher for Natives | Negative |
| Economic decision theory | Ripsas (1998) | Individuals who are facing discrimination and are at a disadvantage in the job market intend to start their entrepreneurial activities. Therefore, countries with the less favorable job and employment situations should have higher entrepreneurship rates | Higher for Refugees | Positive | |
| Theory of the firm | Auerswald (2008) | Refugees face greater barriers and difficulties than their native counterparts in accessing essential resources given their lack or limited knowledge about the host country | Higher for Natives | Negative | |
| Signaling theory | Connelly et al. (2011) | Getting a positive signal from society about the entrepreneurial activities would empower those activities. Therefore, countries with economic stability and positive financial market performance tend to have a higher rate of entrepreneurship | Higher for Natives | Negative | |
| Institutional | Disadvantage theory | Boyd (2000) | Individuals who are facing discrimination and are at a disadvantage in the job market intend to start their entrepreneurial activities. Therefore, countries with the less favorable job and employment situations should have a higher entrepreneurship rate | Higher for Refugees | Positive |
| Challenge-based theory of entrepreneurship | Miller and Le Breton-Miller (2017) | Challenges/ negative personal circumstances create conditions and experiences that motivate adaptive requirements which in turn foster outcomes such as work discipline, risk tolerance, social and network skills, and creativity | Higher for Refugee | Positive | |
| The network theory | Theory of middleman minorities | Troise (2020)| Zhou (2004) | Countries with a higher population of immigrants and emigrants are more likely to have a higher entrepreneurship rate due to the connections that those people would probably establish between two or more societies | Higher for Refugees | Positive |
| Factors | Theory | Proponents (authors/ studies) | Mechanisms that support/explain the entrepreneurship rates | The entrepreneurial propensity of refugees versus native individuals | Expected impact of refugee inflows on the host country’s entrepreneurship rate |
|---|---|---|---|---|---|
| Psychological | Humanistic psychology | Life stability is related to entrepreneurship. Countries with more middle-aged people with a more stable lifestyle are expected to have a higher rate of entrepreneurship | Higher for Natives | Negative | |
| Planned behavior | Cognitive psychology theory | People with an openness to experience, self-reliance and emotional stability characteristics tend to have a higher entrepreneurship rate. Hence, having more people with lower emotional stability in a country tends to decrease the entrepreneurship rate | Higher for Natives | Negative | ||
| Shackle’s theory | An entrepreneur is a risk-taker, a person who can decide in uncertain and dynamic environments. As refugees have a high level of risk-taking behavior, an increase in their inflows would increase the entrepreneurship rate of host countries | Higher for Refugees | Positive | ||
| Economic | Casson’s theory | Countries with more transparency and easier access to financial and information resources tend to have a higher entrepreneurship rate. However, natives benefit more due to their knowledge about the market and available information | Higher for Natives | Negative | |
| Economic decision theory | Individuals who are facing discrimination and are at a disadvantage in the job market intend to start their entrepreneurial activities. Therefore, countries with the less favorable job and employment situations should have higher entrepreneurship rates | Higher for Refugees | Positive | ||
| Theory of the firm | Refugees face greater barriers and difficulties than their native counterparts in accessing essential resources given their lack or limited knowledge about the host country | Higher for Natives | Negative | ||
| Signaling theory | Getting a positive signal from society about the entrepreneurial activities would empower those activities. Therefore, countries with economic stability and positive financial market performance tend to have a higher rate of entrepreneurship | Higher for Natives | Negative | ||
| Institutional | Disadvantage theory | Individuals who are facing discrimination and are at a disadvantage in the job market intend to start their entrepreneurial activities. Therefore, countries with the less favorable job and employment situations should have a higher entrepreneurship rate | Higher for Refugees | Positive | |
| Challenge-based theory of entrepreneurship | Challenges/ negative personal circumstances create conditions and experiences that motivate adaptive requirements which in turn foster outcomes such as work discipline, risk tolerance, social and network skills, and creativity | Higher for Refugee | Positive | ||
| The network theory | Theory of middleman minorities | Countries with a higher population of immigrants and emigrants are more likely to have a higher entrepreneurship rate due to the connections that those people would probably establish between two or more societies | Higher for Refugees | Positive |