A cross-national study of culture, organization and entrepreneurship in three neighbourhoods

When and how do informal institutions reduce the transaction costs for entrepreneurs? This question is the focus of my cross-national study of culture and economic activities. I present comparative evidence from three neighbourhoods across two countries suggesting diverging patterns of entrepreneurship. In the first neighbourhood, social norms and relationships integrate into economic activities. It is very different in the other two neighbourhoods where social norms and relationships are kept out of economic activities: here, evidence suggests that communities create cultural separation through formal institutions or through privatization. Beyond analysing the contrasting relevance of culture in entrepreneurial activities, I explain why these different patterns emerge. Structural factors contribute to contrasting processes of immigrant adaptation in the host countries. The structural context of immigration laws, housing and education policies affect the way in which groups organize in the respective neighbourhoods, and it is these patterns of organization that dictate the subsequent relevance of culture in entrepreneurship.