The effects of cultural dimensions of ethnicity on small business start-up decisions in regional Thailand
Creators: name: Rurkwararuk, Warawude
Publisher: name: The Australian National University
Year: 2010
Subjects: subject: HD2346.T5 R87 2010
subject: Small business Thailand
subject: Minority business enterprises Thailand
subject: Thailand Social life and customs

description: This research examines the extent to which cultural dimensions of ethnicity affect individual decisions to start a small business in regional Thailand. A theoretical framework is developed to explain how the cultural dimensions of ethnicity may affect the start-up decisions. The framework draws upon theories in economics, social psychology, and cultural anthropology as they apply to business-founder motivation and cultural influences on economic decisions. Postulations arising from the framework are tested by surveying of small business owners and non-business owners in regional Thailand using an extensive questionnaire. The most dominant ancestral heritage group identified by the respondents is chosen as a cultural identifier used throughout the analysis. The respondents are the Thai; the Chinese; the Lao; and the Korat Tai. Snowball sampling was used to gain access to appropriate respondents expected to be representative of the ethnic groups under investigation. There were 614 usable responses, comprised of 32 per cent small business owners, 10 per cent micro business owners and 52 per cent non-owners. Of the self-identified ethnic groups based on heritage identifier, the proportions are 18 per cent Lao, 17 per cent Chinese, 48 per cent Thai and 13 per cent Korat Tai. The results reveal that though a person identified as Chinese is more likely than a person from another ethnic group to be a small business owner, they do not show significant difference. At the extremes, living in urbanised areas are more likely to lead to owning businesses, while having been living in a more remote area are the opposite. However, it is not necessarily a pre-requisite to ownership of businesses. Business education, internships, helping in a family business as children and business training were not found to be related to business ownership or start-ups in regional Thailand and are not related to the Chinese as expected. Being pro-business and less risk-averse is related to business start-ups and this related to any heritage group, not only the Chinese. People who feel free to do business and people around them also support them if they choose so are tentatively be 'in-business'. The career of the most influential person in their life tends to affect their current occupation. People with role models 'in-business' are more likely to be 'in business' than those with employee role models. People with role models in governmental service are less likely to be small business owners. People who are younger (from 20-39 years old) are more likely to be employees than older people. Nonetheless, Chinese owners have more positive attitudes towards being in business and are more risk-taking than any other ethnic groups. Need for achievement cannot distinguish business owners from employees. The most important reasons for start-ups are (1) need more income and (2) want to be one's own boss and be independent. The most frequently identified reason for not starting a business is 'lack of capital', especially among the Korat Tai. A high percentage of owners acquired help from those in their heritage group, especially from parents in terms of the initial investment for the business start-ups. Parents of owners tend to be more 'in' business', either small or micro, and freelance or self-employed, and tend to have lower education than parents of the non-owners, across the four heritage groups. No other variables can distinguish owners from non-owners. In conclusion, the owners of small businesses are significantly more pro-business but having more risk-taking propensity than the others. However, heritage Chinese do not show to be more inclined to start up a business than others. This challenges the old belief that Chinese descendants have a higher propensity to run a business. This suggests that anybody with a pro-business while less risk averse (disregarding their ethnic heritage) will have a higher propensity to start a business. Some other environmental factors may play a part in start-up decisions rather than mere culture by heritage.