Abstract

Researchers have long theorized that firms in their early stages suffer from constraints of the liability of newness (Stinchcombe, 1965), and the liability of foreignness (Zaheer, 1995). We observe and examine this issue in the context of Canadian network marketing organizations where individual immigrant entrepreneurs from various ethnic groups use direct-selling methods to achieve substantial success. We argue that factors that are typically considered liabilities for early stage firms may be unique competitive advantages that facilitate startup success for ethnic minorities and immigrant entrepreneurs. Certain “cultural practices” have helped immigrant entrepreneurs overcome difficulties inherent in the network marketing business. We propose that ethnic networks, cultural practice, and other ethnic resources, the foreignness and newness of immigrant entrepreneurs enhance their performance in network marketing.

Share

COinS