The Role of Participation Banks in Inclusion of Immigrant Entrepreneurs in the Game

The Role of Participation Banks in Inclusion of Immigrant Entrepreneurs in the Game

Korhan Arun (Namik Kemal University, Turkey) and Olcay Okun (Ministry of National Defense, Turkey)
DOI: 10.4018/978-1-7998-2925-6.ch008
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Abstract

The cultural context of entrepreneurs is related to business type or funding choices. Conversely, economic systems shape the context of entrepreneurship by proving not only resources but also cultural accounts. From this point of view, for migrant entrepreneurs, economic institutions are primarily cultural toolkits that influence entrepreneurial action from a religious perspective. Participating banking is a new and cultural-based funding option. Migrant entrepreneurship has been researched from a Western perspective. However, interest is considered an unacceptable way of acquiring money in many religious theories and views. The aim of this chapter is to show that entrepreneurs' cultural factors are antecedents of the source of capital, for example, new ways of banking systems coherent with entrepreneurs' cultural views and facilitating entrepreneurship or start-up funding. That is why teaching profit-loss partnership (mudaraba) and capital subsidiary (muşaraka) systems is important in entrepreneurship education.
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Introduction

Self-employment of irregular immigrants has come to be seen as a part of economic integration and appreciated by authors as a way for immigrants to integrate by their bootstraps. However, little is known about both the enablers or constraints for immigrant entrepreneurship (Harima et al., 2019), and the differences between immigrants (Heilbrunn & Iannone, 2019).

Entrepreneurship is embedded in, and fundamentally shaped by, socio-cultural dynamics (Patriotta & Siegel, 2019) because immigrants themselves are culturally, ethnically and racially divergent (George, 2010). Even if entrepreneurs ship activities' context bounded and entrepreneurs are dissimilar, the funding perspective has been researched from West worldly perspective.

So, approaches to entrepreneur education must contain not just western economic aspects but also cultural and context related economic factors in the host countries. Participating banking is that kind of brand new funding concept as favored by entrepreneurs additionally is a new way of funding entrepreneurs should adapt themselves.

The literature interest in immigrant entrepreneurship has considered economic factors rather than social scientists’ research and point of view. Much of this cultural research generally focused on the ethnic elements of immigrant entrepreneurship, and ethnicity has been the research focus through which researchers examined immigrant entrepreneurship.

However, the cultural context of these entrepreneurs has much more related to business type, market segment, or funding choices. The entrepreneurship research has demonstrated that ethnicity is not concise research, especially for international comparisons of theoretical and field application differences and similarities.

In theory, it is possible to separate local entrepreneurs and immigrant entrepreneurs. even though, in practice, this distinction cannot be made quickly without ethical background because there are similarities between the processes and levels they experience. Sociological factors consisting of infrastructure elements, economic conditions, innovation processes, and technological advances are also important.

So, researching immigrant entrepreneurship at the ethnicity level cannot clearly explain the differences between countries, as comparing the success of immigrant entrepreneurs in an area and the relative lack of success of their ethnic counterparts in another area. Additionally, not just the environment of economic factors but also their consistencies to immigrants' characteristics are an essential topic for research (Kloosterman & Rath, 2003).

Despite many benefits of irregular migration, such as increasing the labor supply, contributing to employment, reducing the cost of production, contributing to innovation (Ambrosini, 2017; McAuliffe & Koser, 2017; Mohapatra et al., 2010), there are also problems such as causing job loss, making public services difficult and causing social problems (Messina, 2017; Tunon & Harkins, 2017).

Additionally, many researchers apparently found that economic issues of irregular migration perfectly sensible to hypotheses that market conditions or regulations are of little importance (Boissevain & Grotenbreg, 1987; Kloosterman & Rath, 2003). So, it can be assumed that many problems of irregular immigration are related to society.

Nevertheless, if “society” is defined as “outside society” and “inside society,',” then “society” becomes preoccupied with fending off migrants who threaten its wholeness and integrity (Schinkel, 2017). So, to become a society, migrant entrepreneurs should be seen as a potential economic value. Because, before immigrant entrepreneurs migrate, they may have related entrepreneurial activities and experiences in their own countries.

However, it can be thought that immigrant entrepreneurs will be influenced by the cultural, religious, and legal structure of the countries they come from, and they will show entrepreneurial motivation based on akin processes. Therefore, it is significant to research the effect of the facilitating conditions that make up the enterprise environment in obtaining the initial capital, which is especially influential in the enterprise.

Key Terms in this Chapter

Immigrant Entrepreneurship: It is expressed as entrepreneurship activities carried out by all immigrant individuals.

Selem: It is a type of Islamic financing based on debt in exchange for delivering a certain amount, quality, and type of product at an agreed timeframe.

Participating Banking: A third type of banking, together with Deposit Banks (Conventional Banks) and Development and Investment Banks which are operating in reliance on interest-free banking method are also defined as Religious Banking in international literature.

Murabaha (Instalment Sale): It is a short term contract depending on the mark-up or profit margin, and the total cost that is usually paid in installment.

Musareke: It is both labor and capital partnership in which the project is the responsibility of the customer who contributes to the capital, and the participation bank is the supervisor.

ICARE: It is the process of leasing the right to use the securities or real estate production vehicle (machinery, equipment, etc.) to the other party.

Religious Banking: It is a form of traditional finance, which calls for risk sharing, where lenders receive their returns in line with the risk, they bear, rather than receiving fixed payments regardless of the outcome of the investment which is the case for conventional finance.

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