Entrepreneurship in an Institutionally Distant Context: Bangladeshi Diaspora Entrepreneurs in Denmark

Extant studies have not highlighted how country of origin (COO) and country of residence (COR) in institutionally distant context shape diasporans’ behaviour, rationales, and capabilities, leading to the growth and success of entrepreneurial ventures in the COR; our paper contributes to this gap.

Investigating seven cases (micro, small, and medium enterprises) of Bangladeshi diasporans’ in Denmark, our study presents an in-depth understanding of the impact of dual institutional characteristics, whereby the relatively higher importance of COR institutional features shape diaspora entrepreneurial motivation and management. Motivation and management styles vary due to the length of a diaspora’s stay in the COR, their educational background, relevant previous experience, and degree of social integration in the COR. Some important personality traits, which are shaped by dual institutional features, determine the degree to which diaspora can develop cultural intelligence and social capital in the COR context. This helps the diaspora develop suitable entrepreneurial capabilities to grow the venture, while the personality traits and social capital derive from the diasporans’ educational background and involvement in sports and social activities in the Danish context. This study postulates four broad categories of motivational factors, namely (a) income security and financial success, (b) social recognition and status, (c) work achievement, and (d) independence and autonomy of work, which manifest different types of entrepreneurship depending on the diaspora’s personal background and the nature of the Danish (COR) institutional features. We find a mixed influence of COO and COR institutions on various features of management. Finally, we develop an analytical model, called the ‘House Model’, to explain diasporas’ venture creation and venture management processes in an institutionally distant context and argue that researchers should take into account both the COO’s and COR’s institutional features when examining the growth and survival of diaspora entrepreneurship. Our study contributes to the understanding and practice of transnational diaspora entrepreneurship and management as well as policy formulation by institutional actors.