About the Author(s)


Clavis N. Fubah Email symbol
Department of Business Management, Faculty of Economic and Management Sciences, University of Pretoria, Pretoria, South Africa

Menisha N. Moos symbol
Department of Business Management, Faculty of Economic and Management Sciences, University of Pretoria, Pretoria, South Africa

Citation


Fubah CN, Moos MN. Immigrant entrepreneurship in South Africa: A review and research agenda. J transdiscipl res S Afr. 2022;18(1), a1160. https://doi.org/10.4102/td.v18i1.1160

Note: Additional supporting information may be found in the online version of this article as Online Appendix 1.

Review Article

Immigrant entrepreneurship in South Africa: A review and research agenda

Clavis N. Fubah, Menisha N. Moos

Received: 20 Oct. 2021; Accepted: 27 June 2022; Published: 29 Sept. 2022

Copyright: © 2022. The Author(s). Licensee: AOSIS.
This is an Open Access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

Immigrant entrepreneurship is a global phenomenon that has recently attracted the interest of South African academics. The goal of this article was to conduct a systematic review of the literature on immigrant entrepreneurship in South African (SA) between 2009 and 2021. This systematic review was especially important because it synthesised the current literature on immigrant entrepreneurship in SA as well as proposing new avenues for research. The review included 48 articles, with an emphasis on publication trends, methodological and theoretical approaches, provincial focus, networks used by immigrant entrepreneurs and the barriers faced by immigrant entrepreneurs in SA. The findings indicate that scholarly interest in the concept has increased in SA since 2016–2018, which recorded the highest number of publications (16). The majority of studies in the review employed a quantitative approach; thus, further theorisation of the concept is required, and immigrant entrepreneurs are encouraged to explore other networks such as family, business, managerial and interorganisational networks.

This article contributes to immigrant entrepreneurship literature in the South African context by synthesising the findings on immigrant entrepreneurship published within the designated timeframe. In addition, the article also identifies areas of future research on immigrant entrepreneurship in SA.

Keywords: entrepreneurship; immigrant entrepreneurs; immigrant entrepreneurship; systematic literature review; South Africa.

Introduction

International migration has become a global phenomenon that shows no signs of slowing. Several scholars share a similar view,1,2,3 asserting that globally, millions of people are on the move, attempting to settle down in foreign countries. International migration is driven by socio-economic and political factors, such as conflict, labour market demand and income disparities.3,4 There have been considerable movements in sub-Saharan Africa within the past two decades.1,5 Skinner and Hunter1 noted that this continuous and increasing migration in sub-Saharan Africa is because of ethnic conflicts and political instability that has plagued some African countries, such as Rwanda, Angola, the Democratic Republic of Congo, Somalia and Burundi, among others. These movements are usually a result of people trying to look for greater job opportunities. South Africa (SA), which is generally regarded as having a vibrant and developed economy, is typically a destination for the majority of the displaced population from other African countries.1,4,6 The majority of these migrants, mostly from neighbouring countries, typically settle in South African cities such as Cape Town, Durban, Tshwane and Johannesburg, where they engage in informal street trading for a living. They may seek employment in SA’s informal sector because of the lack of entry barriers in the informal sector,7 while others engage in entrepreneurial activities (immigrant entrepreneurship).

The last decades have recorded an increase in the influx of African immigrants into the different provinces in SA,8 as well as a surge in research focusing on immigrant entrepreneurs in the developing world, especially in SA.9,10,11,12,13,14 Evidence suggests that most immigrants arrive in SA unskilled, while skilled immigrants lack proper documentation, making it difficult for them to find work in the South African economy.4 Because of a lack of proper documentation and high unemployment in SA, the majority of migrants usually resort to entrepreneurship for survival, with the most common starting point being informal street vending.7,15,16,17

Street vending (trading) is a global phenomenon that is not limited to developing countries, as it exists in developed economies as well. South African street traders (including immigrants) sell everything from clothing, shoes and crafts to perishables (e.g. vegetables). Street trading is particularly prevalent in immigrant populations because, according to Moyo et al.,18 several challenges prevent immigrant workers from gaining formal employment. However, these challenges do not merely pertain to those who would seek formal employment. Street vendors are often harassed by government officials, such as police officers who frequently conduct arrests, confiscate goods and demand bribes.15 Conflicts and tensions often arise between South African citizens and immigrant street traders who compete for space on the streets, with locals referring to immigrants as ‘illegal foreigners’.17 While immigrant entrepreneurship plays a vital role in the South African economy (it fosters innovation, produces wealth and creates jobs),11,13 these entrepreneurs are hounded by xenophobic attacks,13,14 a lack of local networks11,19 and a lack of access to financial resources.8

Immigrant entrepreneurship is the pursuit of entrepreneurial activities by immigrants just after arrival in their host country through personal initiatives or with assistance from acquaintances.20,21,22 The businesses managed by the immigrants are called immigrant-owned businesses.8 Immigrant entrepreneurs are people who have established a business in their host country as a source of income. Though there has been a surge in research focusing on immigrant entrepreneurship, the concept remains an under-researched area in the management field.

South Africa has attracted a large number of immigrant entrepreneurs over the years. As there has been a decrease in the number of South African citizens who were involved in entrepreneurship, immigrant entrepreneurs have continuously tried to fill this vacuum.19 Approximately 80% of African immigrant entrepreneurs involve South African citizens in their business ventures.23 Despite all these efforts, the South African government has failed to validate the role played by the immigrant entrepreneurs. For instance, a survey conducted by Torrington et al.24 outlined that immigrant entrepreneurs were excluded from applying for the coronavirus disease 2019 (COVID-19) relief funds for businesses, even though they employ citizens. A similar view is shared by Muchineripi et al.,19 who cited a report that was conducted by the Gordon Institute of Business Science (GIBS) in 2015, which states that:

[T]he government has not fully recognised the impact that the growth being offered by immigrant entrepreneurship can have on the unemployed youth of SA, especially given the necessary support required.

As a result, immigrant entrepreneurs face numerous challenges in the South African economy, which may have a negative impact on their growth.

The past years have recorded an increase in publications on immigrant entrepreneurship in SA; however, much less has been done in synthesising the findings of these publications. Fatoki25 made an effort to synthesise these findings; however, the author focused on motivations and obstacles, networking, competencies and performance, ethics and gender. Since Fatoki’s25 first attempt, much less has been done to synthesise the literature on immigrant entrepreneurship in SA. It is critical to comprehend how research on a global phenomenon such as immigrant entrepreneurship has evolved over time and in different contexts (such as SA and its provinces). It is also critical to examine the methodologies and theoretical frameworks that have been used to study immigrant entrepreneurship, as this can inform and direct future research. Furthermore, it is also critical to investigate the networks used by immigrant entrepreneurs in SA, as networking is important for the success of all businesses.

In this article, the researchers intend to systematically review prior research on immigrant entrepreneurship and contribute to the available body of literature on immigrant entrepreneurship in SA between 2009 and 2021. The review will be guided by the following questions:

RQ1: How has immigrant entrepreneurship research in SA evolved?

RQ2: Which methodologies and theoretical frameworks are employed in the study of immigrant entrepreneurship in SA?

RQ3: Which provinces have been studied in terms of immigrant entrepreneurship in SA?

RQ4: What types of networks are used by immigrant entrepreneurs in SA?

RQ5: What are the barriers faced by immigrant entrepreneurs in SA?

The following section presents a review of the literature on immigrant entrepreneurs and entrepreneurship, barriers to immigrant entrepreneurship, networking and immigrant entrepreneurship, as well as the methodologies and theories used in immigrant entrepreneurship. This will be followed by the methodology, the findings, discussions of the findings and the conclusion.

Literature review

Immigrant entrepreneurs and entrepreneurship

As previously stated, an immigrant entrepreneur is a person who has moved to a new country and started a business, with the primary goal of making money. Specifically, ‘an entrepreneur is an individual who establishes and manages a business for profit and growth’.26 Entrepreneurship plays an important role in the economic development of nations in both the developing and developed world.19,27,28,29 Scholars have advanced various definitions for the concept, implying that a clear and unified definition of entrepreneurship does not exist. According to Ezennia et al.,30 who support this view, the search for a unified and acceptable definition of entrepreneurship has been very difficult, leading researchers to adopt or define entrepreneurship based on the focus of their study. Therefore, entrepreneurship is a wider concept which examines how, by whom and with what effects opportuni-ties are sought, assessed and exploited to create future goods and services.31,32

Immigrant entrepreneurship, as with mainstream entrepreneurship, lacks a unified definition. This is because of the different views and the multiplicity of definitions that have been proposed by scholars.21,33 Immigrant entrepreneurship has been recognised as an important socio-economic phenomenon that contributes to economic growth and development.34 This is motivated by immigrant entrepreneurs’ ability to create jobs, which reduces high unemployment rates in host countries such as SA.25,35,36 Despite the important role that immigrant entrepreneurs play in their host countries, research indicates that they face challenges that have a negative impact on their businesses in these host countries, as will be reviewed in the next section.

Challenges faced by immigrant entrepreneurs

Several studies have focused on the challenges, difficulties and barriers faced by entrepreneurs (both male and female entrepreneurs), including immigrants.37,38,39,40,41,42 Research suggests that female entrepreneurs face challenges that may result from internal or external factors.37 While the internal challenges can easily be addressed by the entrepreneurs themselves, it is often very challenging to manage the external challenges (such as lack of access to markets). The challenges which affect women entrepreneurs in emergent economies include gender discrimination (entrepreneurship being perceived to be a man’s career), work and family conflicts, financial difficulties, lack of necessary entrepreneurial skills, lack of family support and support from male counterparts and lack of access to supportive infrastructure.37,40 Cho et al.,38 who shared a similar view, also pointed out that compared to male entrepreneurs who have entrepreneurial skills, female entrepreneurs are less educated, which accounts for fewer chances of success in entrepreneurial journeys. Prior evidence also suggests that women, particularly those from developing countries, have very little or no human capital as a result of cultural beliefs and influences. For example, Muslim female entrepreneurs face such challenges (such as insufficient financial support, gender inequality and fear of risk) as a result of their traditional and cultural beliefs.42 While Panda37 posited that the challenges (as previously mentioned) may affect women entrepreneurs in the emerging economies, it is important to note that such challenges can be attributed to every entrepreneur, including youths, men and immigrants.

Another strand of literature asserts that the challenges that immigrant entrepreneurs face include unemployment, cultural and language barriers, lack of work experience and lack of required qualifications.22,43,44 In terms of unemployment, Gautam43 claimed that immigrants who are unable to find formal employment or are dissatisfied with their current jobs usually turn to entrepreneurship in the host country. This dissatisfaction can be attributed to the low wages typically offered to immigrants, which can lead to conflict with the locals. Finding work for immigrants can be difficult at times because of high unemployment rates, which are becoming a common feature of all economies. Lack of required qualifications and language barriers, coupled with the fact that some qualifications may not be recognised in the host country, are also major challenges. Examples include the case of Indian (and African) immigrant entrepreneurs in New Zealand who face English language difficulties while their qualifications are often undervalued.45,46 Migrant entrepreneurs, particularly women, also face internal and external challenges explained by their lack of capital (human and financial).39 Other challenges faced by immigrant entrepreneurs, particularly in the South African economy, are xenophobic attacks, Afrophobia (in the South African context: hatred and negative attitudes towards African immigrants in South Africa), lack of local networks, policy and government regulations, criminality and lack of funding opportunities, among others.1,14,19,25

The xenophobic attacks which took place in 2008 and 2015 stand out as one of the main barriers that are unique to immigrant entrepreneurs in SA.14,47,48 In support of this assertion, Tevera49 added that xenophobia is a cause for concern because it generates rhetoric that sometimes serves as justification for denying foreign nationals access to basic services such as shelter, public health and education. Xenophobic attacks in SA have mainly been on African immigrants, who are often referred to by black South African citizens as ‘makwerekwere’.50 Mothibi et al.47 posited that xenophobia takes the form of looting and destruction of the properties and belongings of immigrants, mentioning the shops owned by Somalians and Chinese nationals that were destroyed in Limpopo in March 2014, leaving them stranded and forced to seek refuge elsewhere. According to Khosa and Kalitanyi48 and Ngota et al.,14 xenophobic attacks in the South African economy have forced immigrants who own small businesses to stop temporarily, while others have had to close their doors permanently.

Networking and immigrant entrepreneurship

Scholars have highlighted the important role of networks in the business success of entrepreneurs, including immigrants.11,25,51,52 Networking refers to the beneficial relationship which exists between a business owner and the other parties in the network. Fatoki25 posited that networking is simply the exchange of information and benefits. Networking is regarded as a critical mechanism that encourages cooperation, thereby promoting the achievement of common goals.53 Several scholars have noted that business owners mainly engage in networking to exchange information on possible resources which can assist them in running their ventures successfully.54,55,56 Networking is especially important for immigrant entrepreneurs because they rely heavily on locals in their host countries to understand how the host country’s economy works.53 Individuals such as managers of businesses also use networking to source and exploit opportunities.25

Different types of networks have been identified in prior literature; these include social, managerial, business, ethnic, family and interorganisational networks, among others.51,53,57,58 Social networks are relationships with friends, family members and other acquaintances.57 Managerial networks refer to the relationships that managers of firms have with other individuals who are directly or indirectly related to the firm59; they can also be described as relationships that firms have with their suppliers and similar firms. Business networking is the exchange relationship which exists between two or more businesses.51 Ethnic networks refer to the beneficial relationships that exist between individuals from the same ethnic background.51 Family networks are relationships with close and extended family members.60,61 Finally, interorganisational networks are mutually beneficial relationships that exist between two or more legally operating entities.62 Prior research indicates that, while networks play a role in the business success of entrepreneurs, immigrant entrepreneurs in SA limit themselves to co-ethnic networks and do not move to other networks.11

Methodologies and theoretical frameworks in immigrant entrepreneurship research

Scholars have used various methodologies to study immigrant entrepreneurship. These studies ranged from commentaries to conceptual write-ups and empirical studies (adopting a qualitative or a quantitative research method).21,63 In addition, different theories have been used in immigrant entrepreneurship research. Most of these theories arise from the field of sociology64; Aliaga-Isla and Rialp63 posited that although these sociological theories are used in immigrant entrepreneurship, some of the theories need to be used in specific scenarios. Some of the theories used in immigrant entrepreneurship have been classical theories, for instance, the human and social capital theories, which are frequently used in other fields of study. Well-structured systematic literature reviews in immigrant entrepreneurship, such as those conducted by Aliaga-Isla and Rialp63 and Dabić et al.,21 identified some of the frequently used theories in immigrant entrepreneurship as capital theory, embeddedness theory, intersectionality theory, institutional theory, culture frameworks and immigration theories. The human capital theory and the disadvantage theory are discussed in this study with regard to how they relate to immigrant entrepreneurship research.

The human capital theory emphasises how value can be created for the individual through education and training.65 According to Nafukho et al.,66 this perspective emphasises education and training as deliberate investments that prepare the labour force in an economy and may increase productivity as well as international growth. This could imply that human capital (education, skills and training) is extremely important in the formation of any business. Another line of reasoning from the preceding discussion is that people who lack human capital (education and training) may struggle to start and manage their businesses. Furthermore, prior research indicates that human capital (skills and knowledge) acquired by an entrepreneur through formal education and training is an important resource that can enable immigrants to engage in employment and entrepreneurial activities in the host country.41 Dabić et al.21 shared a similar view, adding that the human capital theory has also been widely used in studies focusing on immigration to explain educational qualifications, skills, experience and immigrants’ engagement in entrepreneurial activities in their host countries. As a result, this theory could be used to explain why some immigrants succeed while others struggle in their host countries.

The disadvantage theory suggests that immigrants (upon arrival in their host countries) are usually faced with significant difficulties which sometimes influence their behaviours.64 These difficulties are what drive immigrants to start businesses to survive.67 Immigrant entrepreneurs in host countries may face difficulties such as unemployment, a lack of understanding of the local language, undervaluation of their qualifications and a lack of prior experience.21,43,63 These typically make it difficult for immigrants to integrate into the host country’s labour market, and as a result, they turn to entrepreneurship (with most starting as informal street traders).

Methodology

This study used a systematic review method to answer the research questions and tables to synthesise the information related to the research questions. According to Snyder,68 a systematic review aims to ‘identify, appraise and synthesise all the empirical evidence that meets pre-specified eligibility criteria to answer a given research question’. The goal of systematic reviews is to identify, access and synthesise findings from individual articles on a specific topic to enable informed decision-making.69 Using a systematic literature review method, a reliable account of the current state of immigrant entrepreneurship research in the South African context was provided. The next section focuses on the eligibility criteria that were used.

Eligibility criteria

The first step in the systematic literature review was deciding upon the eligibility criteria and selecting the relevant material.

The inclusion criteria

Evidence suggests that immigrants are more likely than locals to engage in entrepreneurial activities in countries such as the United States of America, the United Kingdom and Australia;70,71 the same can be said in the case of SA. Since the xenophobic attacks on immigrants in SA in 2008, there have been numerous debates, with academics and policymakers unsure of what caused the attacks. Some scholars believe it was because of poverty and the fact that foreign nationals were taking South African jobs, while others accept low wages, causing friction with locals.72 Prior research also holds that small to medium enterprises (SMEs) belonging to foreign nationals were destroyed by locals. For instance, stores and tuck shops that belonged to migrants were looted and destroyed, causing psychological trauma to the survivors.72 The attack also had and continues to have a disproportionate effect on immigrant entrepreneurs and their businesses in SA. Since these attacks, there have been many debates on immigrant entrepreneurs and their role in SA,13,19 which motivated the researchers’ decision to focus on immigrant entrepreneurship in SA from January 2009 to August 2021 (the date when the search for papers ended). To be included in the review, the article had to be on immigrant entrepreneurship in SA. All articles had to be peer-reviewed, full text and written in the English language, and the article could either be empirical or conceptual.

Exclusion criteria

Articles that were not written in English or peer-reviewed were excluded from the review. In addition, articles not published within the designated period (January 2009 and August 2021) were excluded from the review. The review also excluded theses, dissertations, reports and conference papers. Similar systematic reviews in the same context were also excluded from this review.

The keywords and databases searched

An initial search was conducted to identify possible systematic reviews that have been published on immigrant entrepreneurship in SA. The rationale was to ensure that there was a need for a systematic review on the topic. Only one systematic literature review25 was found, and it was eliminated from the final set of articles that were reviewed. The keywords included in the search were ‘immigrant entrepreneurship*’ OR ‘immigrant entrepreneurs*’ OR ‘immigrant small and medium-sized enterprises*’ OR ‘immigrant enterprises*’ OR ‘immigrant-owned SMEs*’ AND South Africa. The Boolean ‘OR’ was used in the search since the words (in italics) are often used interchangeably by scholars, and ‘AND’ was then used, since the focus of the search was on immigrant entrepreneurship in SA. The search was conducted on the Scopus database and Google Scholar between July and August 2021. Scopus and Google Scholar were chosen for the search as they have been widely used as search databases in academic research73,74,75 and on immigrant entrepreneurship research.76 Scopus was also used because it provides a more diverse range (data) of scientific and peer-reviewed journal articles.77

The search strategy and data extraction

Following Moher et al.78 and Snyder,68 during the initial search, articles were selected for inclusion in the review based on the relevance of their titles to the topic. The abstract, introduction and conclusion of all relevant literature were read and screened by the researchers. Material that was closely related to the topic under review was downloaded. The downloaded material was then read critically while making notes on relevant and important points. The authors extracted the data from the 48 articles that met the inclusion criteria. To ensure the integrity of this article, the review was based on the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) guide by Moher et al.78 The PRISMA statement consists of a checklist of 27 items and a four-phase diagram designed to assist authors in reporting the systematic review process. Figure 1 is formulated based on the PRISMA guidelines by Moher et al.78

FIGURE 1: Summary of the search process used in the review.

As indicated in Figure 1, an initial search on Scopus yielded 54 articles, while a search on Google Scholar yielded 38 articles, for a total of 89 articles. After comparing the results, duplicates were removed, with 63 articles left for screening. During the screening process, 11 articles did not meet the inclusion criteria and were therefore excluded from the review. A total of 52 articles were then assessed for eligibility, and because the researchers were unable to locate four articles, the final review only included 48 articles.

Data analysis

Data analysis for this article is presented in the following sections (see Table 1 and Online Appendix 1). The analysis is based on the guiding research questions, namely (1) what is the publication trend, (2) what research methods or theories have been explored, (3) which provinces in SA have received much scholarly attention, (4) what types of networks are used by immigrant entrepreneurs and (5) what are the barriers faced by immigrant entrepreneurs in SA?

TABLE 1: Data analysis of the systematic literature review.

Table 1 is organised according to the research questions and the number of articles (48) that were included in the review. The authors indicated the statistics based on the 48 articles by using numbers and the letter ‘X’. In addition, some articles mentioned more than one network and multiple barriers. As a result, the authors decided to use the letter ‘X’ for repetition and instead separated the articles based on those that mentioned theories, networks or barriers and those that did not. For example, 25 articles specified which theories they employed, whereas 23 articles did not employ any theory at all. There were six articles that mentioned networks, while the remaining 42 articles did not. In addition, five articles focused on barriers, while the remaining 43 had nothing to do with barriers.

Publication trend

Table 1 shows that immigrant entrepreneurship was still in its infancy in SA between 2009 and 2012, with only four publications.11,23,79,80 This changed dramatically between 2013 and 2015, with a total of 13 journal articles.9,12,13,15,16,48,58,81,82,83,84,85,86 From 2016 to 2018, SA had the most (16) articles published on immigrant entrepreneurs.14,34,35,36,87,88,89,90,91,92,93,94,95,96,97,98 Between 2019 and 2021, this number decreased to 15 articles.19,30,99,100,101,102,103,104,105,106,107,108,109,110,111

Methodological approaches

Table 1 shows the various methodological approaches used in the review articles. According to the findings, the majority of studies on immigrant entrepreneurship in SA conducted between 2009 and 2021 used a quantitative research method (25 articles).9,11,14,15,16,30,79,81,83,85,87,89,90,91,92,93,94,95,98,104,105,106,107,108,109 This was followed by 10 articles that used a combination of quantitative and qualitative research methods (mixed methods).12,34,35,36,48,79,85,97,110,111 Only seven articles used qualitative research,13,19,58,81,88,96,102 while six used other research methods (e.g. systematic review, grounded theory and desk methodology).23,83,100,101,102,103

Theoretical approaches

Table 1 summarises the various theories that were used in the review articles. The review identified 25 articles that based their research on theories, and some of them mentioned more than one theory; however, 23 of the articles in the review did not specify any theory. The analysis indicated that the ethnic enclave theory was used to underpin the majority of research on immigrant entrepreneurship in SA.34,79,83,84,89,90,92,101,110

Market disadvantage theory,11,12,92,94,96,108 middle man minority theory,12,85,89,94,108 ethnic market niche theory,80,85,89,90,101 resource dependence theory,58,82,83 cultural theory11,94,108 and blocked mobility theory79,83,90 were identified as other theories that have been used widely in grounding immigrant entrepreneurship research in SA. Other theories which received far less attention were social capital theory,104 role theory and social identity theory,93 agency and pecking order theory,92 cognitive moral development and stakeholder theory,79 motivational theory and human capital theory,96 power and economic theory13 and skills acquisition theory.111

Provincial focus

The majority of the articles in the review focused on a specific province in SA, while five of the articles did not;89,90,91,99,101 rather, they focused on the country as a whole. The majority (15) of the studies on immigrant entrepreneurship in SA were conducted in the Western Cape province, specifically in the Cape Town area. This was followed by the Eastern Cape, which had 12 studies, Gauteng (11), KwaZulu-Natal (2), Limpopo (2) and North West (1).

Networking

The review identified some networks which are frequently mentioned in immigrant entrepreneurship research in SA by scholars. From Table 1, it is evident that the networks included social networks,88,90,104 ethnic networks,79 co-ethnic networks,11 business, official and general networks,58 innovation networks and solidarity networks.104 These networks can assist immigrant entrepreneurs in acquiring scarce resources needed for operating their businesses in the host country.

Barriers faced by immigrant entrepreneurs in South Africa

The analysis in Table 1 indicates that some articles on immigrant entrepreneurship in SA focused specifically on barriers, challenges and obstacles faced by immigrant entrepreneurs. These challenges and barriers include lack of access to finance, Afrophobia and xenophobic attacks,12,14,19,48 lack of networks,11,19,58 language barriers,11,48 lack of skills14 and lack of government support.11

Discussion

Publication trends

According to the review, immigrant entrepreneurship in SA is rapidly evolving, as evidenced by a significant increase in the number of peer-reviewed articles published between 2009 and 2012 and again between 2013 and 2021. It is important to note, however, that there is room to increase the number of publications on immigrant entrepreneurship on an annual basis as this would enable researchers to uncover new findings on the global phenomenon in the South African context.

Methodological focus

The review suggests that the majority of research on immigrant entrepreneurship in SA conducted between 2009 and 2021 deployed a quantitative research method, with the rest focusing on mixed methods, qualitative and other research methodologies. These various methodologies have been used depending on the scope, objective and parameters being tested in the research. In this light, scholars are constantly urging future research to use a different research method to confirm the findings of prior research. As a result, more research on immigrant entrepreneurship in SA is required, and any of the above research methods will provide additional insights into the global phenomenon. More specifically, Chimucheka et al.104 investigated the extent to which social networks affect the performance of immigrant entrepreneurs. Their study used a nonprobability sampling method and a quantitative research method, foregoing the benefit of a qualitative method in the process. They accomplished their goal; however, they recommended that future research in this area should use a qualitative research method to gain more insights into the use of social networks by immigrant entrepreneurs in SA. Other research methods, such as mixed-methods and longitudinal methods, can be used in exploring the same phenomenon.

Theoretical approaches

Underpinning research on theories is important and gives a clear viewpoint on what the researcher is focusing on. Numerous theories can be used for understanding immigrant entrepreneurship research, such as those listed in Table 1. Other theories (e.g. agency theory, network theory and institutional theory) can also be borrowed from different fields and used in immigrant entrepreneurship research. However, there is a need for more research to focus on identifying the relevant theories that can be used to underpin immigrant entrepreneurship research in the South African context. Asoba et al.101 made an effort in this regard; however, they focused only on four such theories (blocked opportunity theory, ethnic market niche theory, educated migrant pull factor theory and ethnic enclave theory). Therefore, future research can focus on presenting an overview of other relevant theories of immigrant entrepreneurship in SA, as this will inform and direct further application and theorisation of immigrant entrepreneurship in the South African context.

In addition, the analysis indicated that some studies79,89,91,108 mentioned about four to five theories. These multiple theories are used in one study because the study is made up of different constructs that are best explained by different theories. The use of multiple theories in one study generates new perspectives and research agendas to further the development of new knowledge on immigrant entrepreneurship in SA. Multiple theories are also used as contradictory – in which the insights of the theories on immigrant entrepreneurship are compared before choosing one over the other.112 This shows how important it is to anchor research on supporting and relevant theories. Therefore, future research should endeavour to anchor their studies on relevant or pre-acknowledged theories.

Provincial focus

Migration has become an important economic phenomenon, particularly in countries with enticing factors such as democracy, guaranteed human rights and favourable economic conditions.85 South Africa is one of the African countries with favourable conditions that has attracted an influx of immigrant entrepreneurs into its various provinces. The findings in Table 1 indicate that out of the nine provinces in SA, some (Western Cape, Eastern Cape and Gauteng provinces) have received much attention from immigrant entrepreneurship scholars, while others have received little (KwaZulu-Natal, Limpopo and North West provinces) or no attention (Mpumalanga, Northern Cape and Free State).

Networking

Fatoki and Oni58 reported that entrepreneurs usually need finances, skills and other resources to start business ventures. However, having access to such crucial resources is usually a major challenge for nascent entrepreneurs, including immigrant entrepreneurs in SA. Some entrepreneurs might have some of the resources (human capital) but may also lack access to some of the crucial resources (e.g. information and finance). As such, entrepreneurs need to network with others to have access to such resources. Therefore, the personal networks of an entrepreneur are, in itself, a resource.83 Different networks have been identified which can have a positive impact on the business operations of entrepreneurs, including ethnic networks,79 official networks, general and business networks,58 as well as social networks.104

Despite the role that networks play in providing accessibility to scarce resources, which are vital for the business operations of immigrant entrepreneurs, Fatoki and Patswawairi11 found that African immigrant entrepreneurs in SA rely primarily on co-ethnic networks for business support and do not move to other networks. Immigrant entrepreneurs in SA also frequently lament the lack of local networks.19 More recently, Chimucheka et al.104 also discovered that the use of social networks has a positive effect on the performance of immigrant-owned businesses operating in SA’s Eastern Cape province. Fatoki and Oni58 noted that social networking can be dominant during the start-up phase of the business, while business networks could be dominant during the established stage of the business – implying that both social and business networks could play an important role for immigrant entrepreneurs.

Barriers faced by immigrant entrepreneurs in South Africa

Many studies in this review on immigrant entrepreneurship in SA have focused on or mentioned the barriers that are faced by immigrant entrepreneurs.8,14,19 These barriers prevent immigrant entrepreneurs, especially those from other African countries, from succeeding in the South African economy.14 These barriers and challenges could be the reason for the low survival rates of immigrant-owned businesses.

Financial difficulties have been identified as the major challenge that is faced by immigrant entrepreneurs in SA.8,10,35,48 More specifically, immigrant entrepreneurs do not have access to credit facilities in SA.8 In support of this point, Ngota et al.14 surveyed 75 African immigrant entrepreneurs in the O.R. Tambo municipality and found that only 2% of them received funding from banks, while 98% sourced funding from other sources such as family and friends in SA and back home.84 Muchineripi et al.19 posited that because of the lack of access to credit facilities, the business ideas of immigrant entrepreneurs stagnate at an embryonic stage. This could be because of a lack of required documents, such as a South African national identity card and business permits, a lack of collateral required to apply for loans from financial institutions or because of information asymmetry.11 As a result of this fact, immigrant entrepreneurs cannot apply for any support from the government or financial institutions and credit facilities aimed at small businesses. The lack of relationships and networks has also been identified by several scholars as a challenge that is faced by immigrant entrepreneurs in SA.11,19 In support of this, Ngota et al.14 found that insufficient relationships and networks with financial institutions are a major disadvantage for immigrant businesses in Mthatha (Eastern Cape). This implies that having relationships or networking with financial institutions may provide credit access to immigrant entrepreneurs, thereby addressing the lack of credit facilities.

Managerial and financial skills are also crucial in running businesses – something which immigrant entrepreneurs may lack.14 In cases where such skills are absent, entrepreneurs could outsource the service to people who possess such abilities. However, this is not the case with African immigrant-owned businesses because they are typically one-man operations, or they lack the resources, such as finances, to outsource such services.

Afrophobia, xenophobia and crime have also been identified by several scholars12,14,19,48 in the review as major challenges that African immigrant entrepreneurs face in the South African economy. Ngota et al.14 found out that these Afrophobic attacks towards immigrant entrepreneurs could be attributed to jealousy, unemployment and corruption. Scholars14,48 contend that xenophobia is one of the most well-known challenges that immigrant entrepreneurs, particularly those from other African countries, face in the South African economy. This challenge has led to the closure of many businesses owned by African immigrant entrepreneurs and thus their loss of income and livelihood.14,48,95 Muchineripi et al.,19 however, also found (through interviews with participants) that although xenophobia is a notorious challenge faced by immigrant entrepreneurs, it is not rampant (in the Eastern Cape, as compared to other provinces) in every province.

Other minor challenges which are faced by immigrant entrepreneurs in SA are language barriers11,12 and legislation.19 Concerning language barriers, Khosa et al.48 found that apart from English, Xhosa and Afrikaans are the two main languages spoken in Cape Town. This implies that an African immigrant entrepreneur who does not speak these two languages will struggle to operate their business in Cape Town. Relating to legislation, Muchineripi et al.19 posited that participants in their study lamented the bureaucratic procedures that must be followed for their businesses to be legalised in SA. These bureaucratic processes force immigrant entrepreneurs who do not have their required documents to apply for business permits to ultimately operate their businesses illegally.19

Recommendations for future research

Methodological focus

The review indicates that Chinomona et al.13 used a qualitative research method to review the literature on immigrant entrepreneurship, ubuntu and xenophobia in SA. Although they achieved their research goal, they proposed that future research should use a mixed methods approach for more robust results. Mouelle et al.96 used a qualitative research method to investigate the key success factors of female immigrant entrepreneurs, and as such, their findings cannot be generalised; therefore, it encourages future research in the same regard to employing a quantitative or mixed methods approach to enable generalisability of the results. Future studies on immigrant entrepreneurship in SA can also employ case study research designs, because a case study research design can provide concrete, contextual and in-depth knowledge regarding immigrant entrepreneurship in SA. As shown in Table 1, immigrant entrepreneurship research in SA was still in infancy between 2009 and 2012, but this is gradually growing, evidenced by the increase in the number of publications on the concept between 2013 and 2021. As the majority of research on immigrant entrepreneurship in SA has been quantitative, more research on immigrant entrepreneurship using a qualitative research method is encouraged. Qualitative methods like grounded theory are also encouraged as only one study100 in the review used a grounded theory approach. This is because grounded theory advances the conceptual analysis of qualitative data while also providing explicit and sequential guidance for conducting qualitative research.113

Theoretical focus

From the review, it is evident that immigrant entrepreneurship in SA has attracted the attention of scholars;25,30,82,100,102 however, it remains under-theorised. Most of the theories (e.g. social capital and social network theories) that are used have been borrowed from sociology and other fields of study such as psychology and anthropology. There is a need for a theory of immigrant entrepreneurship, particularly in the African context. Future research should build on existing theories, but it should also focus on developing a theory of immigrant entrepreneurship in the South African context. To that end, scholars can continually engage with a community of immigrant entrepreneurs to better understand the various characteristics and factors that motivate each individual to migrate to a host country and start a business there. Although there may be similar factors that lead individuals to migrate to another country and start a business there, the authors believe that there may also be individual factors that, if thoroughly investigated, can lead to discoveries (theory formation). Future studies are also encouraged to use a migration network theory in underpinning immigrant entrepreneurship in SA. The migration network theory focuses on the underlying causes of migration, which can be social, economic or emotional.114 As a result, the migration network plays an important role in providing resources and encouraging entrepreneurship among such migrants.

Provincial focus

Based on the fact that none of the studies in the review was conducted in Mpumalanga, Northern Cape and Free State, future studies on immigrant entrepreneurship in SA should focus on these three provinces. Also, research is encouraged in provinces like KwaZulu-Natal, Limpopo and North West that received much less attention from scholars. This is because scholars continually call on research conducted in one province to be replicated in the context of another province to confirm previous findings. In this direction, Chimucheka et al.104 focused their research on the use of social networks by immigrant entrepreneurs only in the Eastern Cape province, and as such this makes it difficult for their findings to be applied in the other provinces in SA. Future research can therefore investigate the same phenomenon in the different provinces of SA to confirm their findings.

Fatoki,107 who examined the relationship between emotional intelligence and immigrant entrepreneurs in SA, limited the research to Johannesburg and Pretoria in the Gauteng province. He cautioned, however, that care should be exercised in generalising the findings to all immigrant businesses in SA. Therefore, further research in the same regard could be conducted in the other provinces to confirm or contradict his findings. Chimucheka et al.,105 who investigated the effect of entrepreneurial orientation on the performance of immigrant-owned businesses, focused their research on the Eastern Cape province, and they considered only businesses with less than 200 employees. Therefore, to generalise their findings, future research should replicate their studies in the different provinces of SA and include immigrant businesses with more than 200 employees. Furthermore, immigrant entrepreneurs from other regions such as Asia, Europe, Oceania, and North and South America should be included. This is because the majority of research on immigrant entrepreneurship in SA has focused on African immigrant entrepreneurs, particularly those from Western and Southern Africa. Involving all immigrant entrepreneurs in research could provide invaluable insights that are not yet widely known in SA.

Networking

Despite their lack of resources, immigrant entrepreneurs do not use official networks to obtain such resources;58 they mainly limit themselves to co-ethnic networking. As such, Fatoki et al.58 suggested that immigrant entrepreneurs in SA should network with accountants and lawyers. Future research should therefore focus on determining whether other networks, such as family networks, business networks, managerial networks and interorganisational networks, can have an impact on the performance of immigrant entrepreneurs in SA, given the efforts already expended on ethnic and social networks. Individually, these networks can be investigated to gain a thorough understanding of the impact they can have on immigrant entrepreneurs in SA. Finally, Mankgele et al.94 recommend that future research should focus on how to improve networking and teamwork between immigrant and local entrepreneurs in SA. Figure 2 summarises the above-mentioned future research suggestions on immigrant entrepreneurship in SA.

FIGURE 2: Future research suggestions on immigrant entrepreneurship in South Africa.

Barriers faced by immigrant entrepreneurs

Muchineripi et al.,19 who researched the barriers faced by immigrant entrepreneurs, focused on small businesses; as their research excluded businesses operating on a much bigger scale, they suggested that future research in the same direction should include large businesses in their sample. Future research could also focus on the barriers, individually; if these barriers were better understood, they would be easier to circumvent. Most of the studies that focus on barriers and challenges faced by immigrant entrepreneurs focus on African immigrant entrepreneurs;11,14,19 this is despite the fact that SA has immigrant entrepreneurs from other continents such as Europe, Asia and Oceania. Future research can therefore focus on investigating the barriers that are faced by immigrant entrepreneurs who come from these other continents to conclude whether they all face the same problems or not. Additionally, many of the studies on barriers and challenges faced by immigrant entrepreneurs in SA have focused on the Western and Eastern Cape provinces. Perhaps future research could investigate the barriers faced by immigrant entrepreneurs in the other provinces to confirm previous findings or to provide new insights.

Limitations of the review

This study, like most other studies, has its limitations. The study focused on the publication trends, methodological and theoretical approaches employed in immigrant entrepreneurship in SA, the provincial distribution of immigrant entrepreneurship research, the network types used by immigrant entrepreneurs and the barriers faced by immigrant entrepreneurs in SA.

Not all aspects of methodologies and research methods were considered; for example, sampling methods, measurement variables and data collection methods are interesting aspects that future research can focus on. In addition, work in progress, conference proceedings and edited books were not considered in the review. These sources could also have provided additional useful information. Furthermore, despite the authors’ exhaustive Internet search, some studies regarding immigrant entrepreneurship may have been missed. This review only focused on publication trends, methodological and theoretical approaches, provincial focus, networking and the barriers faced by immigrant entrepreneurs. There are other aspects, such as industry focus, that were not captured in the review. It is also reasonable to conclude that the search method and key terms used may have excluded relevant articles that could have provided additional insights into the review.

Conclusion

Immigrant entrepreneurship is a global phenomenon, but it is a new and emerging concept in developing countries, including SA. This article presented a systematic review of immigrant entrepreneurship research in SA between 2009 and 2021. The article concentrated on publication trends, research methods, theoretical approaches, provincial focus, networking and the barriers faced by immigrant entrepreneurs; in addition, the article discussed and proposed areas of future research on the emergent concept. According to the findings, the concept drew more attention from academics between 2016 and 2018. Although the majority of the papers in the review based their research on theories, some studies did not mention any supporting theories. As a result, all research should be based on supporting theories. Most of the articles in the review adopted a quantitative research method. Some provinces have received extraordinarily little or no scholarly attention. Moreover, immigrant entrepreneurs limit themselves to co-ethnic networks and lament the lack of local networks. The researchers are confident that the future research avenues identified above will spark additional research on immigrant entrepreneurship in SA.

A wide variety of studies have contributed to the available body of knowledge on immigrant entrepreneurship. This article attempted to contribute to immigrant entrepreneurship literature in the South African context by synthesising the findings on immigrant entrepreneurship published between 2009 and 2021. The article offers a summary of immigrant entrepreneurship literature in SA that has been published in academic journals.

Acknowledgements

Competing interest

The authors have declared that no competing interests exist.

Authors’ contributions

C.N.F. conceptualised the idea and wrote the first draft of the article. M.N.M. reviewed the first and final drafts of the article.

Ethical considerations

This article followed all ethical standards for a research without direct contact with human or animal subjects.

Funding information

The authors received no financial support for the research, authorship and/or publication of this article.

Data availability

The authors confirm that the data supporting the findings of this study are available at https://docs.google.com/document/d/1jC8x9SJeaO7HWMmHKD70x5DWZqJw_y3x/edit?usp=sharing&ouid=104353174978392330220&rtpof=true&sd=true

Disclaimer

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of any affiliated agency of the authors.

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