Race Legal Resource Materials
Entrepreneurship Law Editorial Team
Wendy Beech, BLACK ENTERPRISE GUIDE TO STARTING YOUR OWN BUSINESS (1999).
Abstract: The author uses stories of successful black entrepreneurs to introduce chapters on legal issues, protecting a business idea, and advertising.
Robert Fairlie and Alicia Robb, Race and Entrepreneurial Success: Black-, Asian-, and White-Owned Businesses in the United States (2010).
Abstract (from Amazon Product Description):
Thirteen million people in the United States—roughly one in ten workers—own a business. And yet rates of business ownership among African Americans are much lower and have been so during the last 100 years. In addition, and perhaps more importantly, businesses owned by African Americans tend to have lower sales, fewer employees and smaller payrolls, lower profits, and higher closure rates. In contrast, Asian American-owned businesses tend to be more successful. In Race and Entrepreneurial Success, minority entrepreneurship authorities Robert Fairlie and Alicia Robb examine racial disparities in business performance. Drawing on the rarely used, restricted-access Characteristics of Business Owners (CBO) data set compiled by the U.S. Census Bureau, Fairlie and Robb examine in particular why Asian-owned firms perform well in comparison to White-owned businesses and Black-owned firms typically do not. They also explore the broader question of why some entrepreneurs are successful and others are not.
Enterprise, Deprivation and Social Exclusion (Alan Southern ed., 2011).
(adapted from publisher):
There is little doubt that in recent years, enterprise has been considered an essential approach in the alleviation of deprivation existing in the developed world. The assumption is that area-based initiatives provide a means by which enterprise can include all members of society in mainstream social and economic activities. The rationale behind Enterprise, Deprivation and Social Exclusion is to critically challenge the notion that enterprise can address the complexity behind deprivation and social exclusion by demonstrating UK and North American examples. The authors see how enterprise has come to be regarded as a means by which poverty can be reduced and new opportunities can be opened up to support individuals. However, the authors here seek to give a greater appreciation to the structural roots of deprivation and pose questions about whether or not enterprise might actually exacerbate structures of social and economic exclusion. What if enterprise actually maintains differences between types of community and keeps individuals entrenched in certain ways of thinking? The contributions in this edited collection will offer a distinct opportunity in respect of both theoretical and empirical advancement. The authors hale from both sides of the Atlantic and form an inter-disciplinary group to provide complementary perspectives in this field.
Melvin L. Oliver & Thomas M. Shapiro, Black Wealth/ White Wealth: A New Perspective on Racial Inequality (1995).
Abstract (from Amazon Product Description):
Racial comparisons by income are misleading, argue these two sociologists, because the black middle class lags far behind its white counterpart in terms of assets that can expand choices and opportunities for generations to come. Their analysis provides telling insight into the causes and persistence of American racial inequality: government policies of suburbanization and redlining helped boost wealth for whites over blacks, while discrimination against blacks long kept them from developing assets through self-employment. The authors' study uncovers "the buried fault line of the American social system," and they note that three times as many whites as blacks grow up in households with three months of financial reserves. Because of such intergenerational transfers of wealth, the authors make a philosophical case for racial reparations but also argue for more feasible policies, such as government-supplemented accounts to make education and home-ownership more available, as well as the modification of tax policies (mortgage deductions, capital gains) that subsidize the rich. Oliver teaches at UCLA, Shapiro at Northeastern University.
Melvin L. Oliver & Thomas M. Shapiro, RACE AND ENTREPRENEURIAL SUCCESS:BLACK-, ASIAN-, AND WHITE-OWNED BUSINESSES IN THE UNITED STATES (1995).
W. Sherman Rogers, THE AFRICAN AMERICAN ENTREPRENEUR: THEN AND NOW (2010).
Product Description (from Amazon): African American entrepreneurship has been an integral part of the American economy since the 1600s. On the eve of the Civil War, the collective wealth of free blacks was approximately $50 million. In 2006, African Americans earned a whopping $744 billion, a figure that exceeds the gross domestic product of all but 15 nations of the 192 independent countries in the world. As W. Sherman Rogers so ably demonstrates, African Americans have achieved these economic gains under difficult circumstances. Slavery, segregation, and legally limited access to property, education, and other opportunities have taken a heavy toll, even to this day. Besides providing a penetrating glimpse into the world of black entrepreneurship both past and present, this book urges African Americans to gain financial independence as entrepreneurs. Business ownership, Rogers argues, will bring security, wealth that can be passed to successive generations, and educated offspring with much greater earning power.
Patricia S. Abril, “Acoustic Segregation” and the Hispanic Small Business Owner, 10 Harv. Latino L. Rev. 1 (2007).
This Article discusses "acoustic segregation" (the condition of systemically created informational discrepancies between two groups of actors within a system) as it relates to the reality, architecture, and application of contract law. The societal and practical reality of the underprivileged small business owner impairs his meaningful access to the economic mainstream due to barriers such as cost of information, language, and lack of knowledge regarding the legal system. Inevitably, fear and mistrust ensue and act to viciously perpetuate the cycle of exclusion. This informational asymmetry creates an insular business world for this category of small business owner. It is a sub-legal world where legal redress is inaccessible and each is his own advocate. The article uses Hispanic small business owners as examples of the acoustic segregation phenomenon. The article analyzes the operation of contract law's decision rules, specifically the doctrine of unconscionability, in relation to the small business owner who is a merchant without “knowledge.” It concludes with a proposal to address acoustic segregation by employing multilingual transactional legal clinics within business and law schools aimed at assisting and educating small business owners.
Robert L. Boyd, Black and Asian Self-Employment in Large Metropolitan Areas: A Comparative Analysis, 37 Soc. Probs. 258 (1990).
Gavin Clarkson, Accredited Indians: Increasing the Flow of Private Equity into Indian Country as a Domestic Emerging Market, 80 U. Colo. L. Rev. 285 (2009).
Abstract: Indian Country is America's domestic emerging market, and as in a number of emerging markets, many successful businesses in Indian Country are starving for expansion capital. The US Treasury estimates that the private equity deficit in Indian Country is $44 billion. While the handful of wealthier tribes might be logical investors in private equity funds deploying capital in Indian Country, the existing securities laws present a significant impediment. In particular, Regulation D of the Securities Act of 1933 does not treat tribes as "accredited investors," thus denying those tribes the ability to participate in the private equity market. Since there is no principled reason to exclude tribes from the list of accredited investors, this Article makes the case for extending accredited investor status to tribes.
Danielle M. Conway, Promoting Indigenous Innovation, Enterprise, and Entrepreneurship Through the Licensing Of Article 31 Indigenous Assets And Resources, 64 SMU L. Rev. 1095 (2011).
One means of implementing the goals and objectives of the Declaration [on the Rights of Indigenous Peoples ] and operationalizing the use of indigenous assets and resources in a collective entrepreneurial effort is the use of licensing to govern transactions, create value, and promote the exercise of indigenous management and control over assets and resources. Focusing specifically on the controlled use of valuable indigenous assets and resources, Part II of this Article describes indigenous entrepreneurship and innovation pre-colonization, the negative effects on indigenous social and economic development post-contact, and colonization's interruptive impact on innovation and enterprise across indigenous diasporas. Part II also presents a discussion about the revival of indigenous innovation and enterprise through the rekindling of traditional knowledge and practices within indigenous communities. Part III analyzes the rights reasserted by Indigenous peoples in the Declaration on the Rights of Indigenous Peoples. The discussion specifically addresses the framework, purpose, and goals of the Declaration to promote authority and control over indigenous lands, resources, and assets. Moreover, there is an examination of the perceived paradox between indigenous values and indigenous participation in the mainstream marketplace. Part IV focuses on licensing as a mechanism to both implement the goals and objectives of the Declaration and to reassert indigenous authority and control over indigenous assets and resources. Part V addresses perceived obstacles to implementing the Declaration through use of licensing. Finally, Part VI concludes with observations and recommendations for universal implementation of the Declaration on the Rights of Indigenous Peoples to secure self-determination through, among other relevant public policy initiatives, indigenous entrepreneurship and economic development.
Nicole S. Dandridge, Racial Etiquette and Social Capital: Challenges Facing Black Entrepreneurs, 32 W. New Eng. L. Rev. 471 (2010).
Abstract (from author):
Historically, successful free enterprise has been more difficult for minority entrepreneurs than it has been for whites. Certain barriers limit access to capital and industry markets as well as access to skills and work experience that facilitate proper business development and sustainability. Merely starting up a business does not mean it will fare well and lead to sustainable self-employment. Notwithstanding an unmistakable boost in minority business start-ups and the fact that entrepreneurial activity is fifty percent greater among black Americans as compared to whites, black-owned firms have lower survival rates than nonminority firms. A contributing cause of this disparity has been, and continues to be, connected to the barriers and challenges rooted in our nation's not-long-past racial-caste system and oppression of blacks. Inequity between the races has created a social condition that directly affects an entrepreneur's access to social capital, which is vital to the successful emergence and continued advancement of one's business. This Article considers social etiquette practices in the United States and suggests that these practices have infected our free-enterprise system with racial bias. By considering socio-racial inequities against the general framework of social capital, the reader will better understand socioeconomic challenges that face black entrepreneurs. Access to social capital (i.e., access to people who build business capacity, networks, and opportunity) and meaningful engagement in this valuable social business construct is more arduous for black entrepreneurs than it is for their white counterparts. Limited social capital translates into limited opportunities for black entrepreneurs to convert valuable social business relationships into financial support that will ultimately fuel successful market entry and growth.
Christine Zuni Cruz, [On the] Road Back In: Community Lawyering in Indigenous Communities, 5 Clinical L. Rev. 557 (1999).
My scholarship and teaching place me in a position to develop "insider law", and with it, an ethic of working within native communities and communicating the process and the result to "outsiders". This paper began with only one specific example or client story; I have since added a few more. Where they are used, I try to relate them as carefully as possible so as not to expose identities or otherwise abridge my own sense of appropriate disclosure of client (individual and community) information. I refer to all who worked on cases as attorneys, whether they were students attorney or attorneys in private practice. Some of my most instructive experiences as a lawyer or as a clinician simply cannot be related at all. This is an especially sensitive issue for me as a native writer who seeks to explain certain aspects of working with the native community. Native peoples have the experience of having been subjected to study and inappropriate disclosure of information by outsider academicians and scholars. In our recent past, pueblo communities have experienced the appropriation of community information by anthropologists and others; the outrage at the "informants" has become a part of our socialization against disclosure.
Dorcas R. Gilmore, Expanding Opportunities for Low-Income Youth: Making Space for Youth Entrepreneurship Legal Services, 18 J. Affordable Hous. & Cmty. Dev. L. 321 (2008-2009).
Abstract: Young people in the United States are on the verge of losing the economic advantages gained by their parents. The loss of wealth resulting from the 2008 foreclosure crisis directly impacts intergenerational transfer of wealth. Parental net worth significantly affects the wealth prospects of children. In addition to parental wealth and income losses, youth are facing greater challenges to entering the labor market. The current economic downturn directly affects the employment prospects of low-income workers and youth workers. The employment rate for teens is at its lowest level in sixty years. Low-income youth are hardest hit by the racial wealth gap. Lack of employment disproportionately affects youth of color. For example, as few as 20 percent of black youth are employed at any one time. Racial economic disparities in employment opportunities, income, and wealth place low-income youth of color in the worst position with few employment options and no transfer of intergenerational wealth upon which to build.
Eric J. Gouvin, Foreword: Entrepreneurship, Race, and the Current Environment for Community Economic Development, 30 W. New Eng. L. Rev. 1 (2007) and the various symposium pieces from that volume of the western new england law review.
Yasser Killawi, Note, Preserving an Entrepreneurial America: How Restrictive Immigration Policies Stifle the Creation and Growth of Startups and Small Businesses, 8 Ohio St. Entrepren. Bus. L.J. 129 (2013).
Abstract (by author): America has always been a land of immigrants. Likewise, America has always been a nation of entrepreneurs. The immigrant entrepreneurial spirit is an essential part of this nation's identity. From its inception, America has attracted entrepreneurial individuals-men and women who left their birthplaces and all they ever knew to pursue the “American Dream.” Today, the immigrant entrepreneur remains relevant and is key to the American economy. Immigrant entrepreneurs are starting new businesses, creating jobs and driving economic growth. Many of America's most iconic companies, such as AT&T, Kraft, Proctor & Gamble, Goldman Sachs, Kohl's, Nordstrom and Capital One were started by immigrant entrepreneurs. However, despite the tangible benefits the American economy has realized as a result of the entrepreneurship and innovation of immigrants, U.S. immigration laws remain unwelcoming to immigrant entrepreneurs. Restrictive immigration policies are turning away many current and future innovative entrepreneurs and inhibiting the creation of new business essential for economic growth. This note will analyze the effect of our restrictive immigration policies on the creation and growth of startups and small businesses. While there is no doubt that our current immigration system is in need of comprehensive reform, this note will not address the wider immigration debate. Rather, this note will focus on the shortcomings of our immigration policies that stifle the creation and growth of startups and small businesses.
Audrey G. McFarlane, Race, Space, and Place: the Geography of Economic Development,36 San Diego L. Rev. 295 (1999).
Abstract from introduction:
This Article examines the extent to which the Empowerment Zones Program can be properly viewed as a neutral, rational, and beneficial program for poor, inner-city communities and their residents by exploring the limits and potential of its chief mechanism, economic development, as a tool to achieve social justice for the inner cities. This Article grounds its exploration within the contested terrain of the city, not simply as a legal or juridical concept, but in terms of its reality as a “lived place” on the eve of the 21st century. By explicating some of the unwritten rules and processes of economic development in their proper context, this Article demonstrates that economic development is not a neutral policy that government can advance without addressing significant structural issues that externally impact inner-city communities. Probably one of the most significant issues is that the program is applied within many cities that are places laden with racialized meaning and are encumbered by the unstated, yet popular, consensus that the problems of the inner cities should be contained. In particular, this Article examines: 1) the legacy of historic programs that have led to current metropolitan configurations characterized by a disparity between declining inner cities and growing edge cities; 2) the impact of globalization and technology; and 3) the present “lived” urban context of racialized space that manifests itself not only in a chasm between city and suburb, but also as an intra-city chasm between elite business interests and poor people. Parts II and III of this Article examines the genesis of the Empowerment Zones concept from the rise in popularity of economic development, both internationally and domestically, as a tool to attain social justice. Part IV explores the context of the “lived” city as both an affluent place for the global elite and marginalized ghetto neighborhoods that have been racialized and “class” ified as black and poor. Part V analyzes the Empowerment Zones Program's emphasis on jobs and the promise of federal funding priority for designated zones. This Article concludes by recommending that we ought to begin to rethink inner city development as an instrument to further economic, social, and geographic justice.
Alan P. Meister, Kathryn R.L. Rand & Steven Andrew Light, Indian Gaming and Beyond: Tribal Economic Development and Diversification, 54 S.D. L. Rev. 375 (2009).
Abstract: Economic development in Indian Country, the topic of this symposium issue, is nearly synonymous with tribal gaming. No other modern industry has had such a substantial economic impact on tribal economies, and no other tribal industry has made such significant contributions outside of tribal economies. Just two decades ago, as Congress deliberated over the bill that would become the Indian Gaming Regulatory Act of 1988 (IGRA), Indian gaming consisted of a few tribes' high-stakes bingo halls and card rooms in a handful of states. Today tribal gaming is one of the fastest growing segments of legalized gambling in the United States, fed by the robust demand for casino gaming. In 1988, Indian gaming in a few bingo halls earned about $121 million; in calendar year 2007, revenues from 425 gaming facilities operated by 230 tribes in 28 states topped $26.5 billion.
Robert J. Miller, American Indian Entrepreneurs: Unique Challenges, Unlimited Potential, 40 Ariz. St. L.J. 1297 (2008).
Abstract (from the introduction):
This Article addresses why there are so few Indian-owned businesses today on and off reservations; the unique legal, practical, and social challenges Indian entrepreneurs face; what can be done to increase their number; and why, despite these challenges, their potential is nearly unlimited. Section one analyzes the unique social, cultural, legal, practical, and financial issues that American Indian entrepreneurs face that are rarely encountered by other American business people. Section two examines the unlimited potential for American Indian entrepreneurs. The Article then concludes with the hope that this unlimited potential can be realized to benefit American Indian nations, their citizens and families, their communities, and the local, state, and national communities as well.
Robert J. Miller, Inter-tribal and International Treaties for American Indian Economic Development, 12 Lewis & Clark, L. Rev. 1103 (2008).
Abstract (from author): American Indian nations and Indian people and Indigenous groups around the world are usually the poorest communities in their countries. These entities must develop and promote economic activities and jobs for their people. Economic development is an absolutely crucial social, political, and legal issue for these governments and their people. Recently, two efforts have been undertaken to create beneficial development based on treaties between Indigenous groups. In August 2007, American Indian nations, Canadian First nations, New Zealand Maori Iwis, and Australian Aborigine groups signed a treaty to engage in international economic activities. In addition, in 2007 and 2008, Pacific Northwest Indian nations drafted an inter-tribal treaty to facilitate the conduct of business on reservations. This Article dissects these two treaties and addresses some of the unique legal issues that the treaties raise.
Damon Moore, Crossing Over: Structuring Foreign Investment That Advance African-American Entrepreneurial Interests in the International Marketplace, 32 T. Marshall L. Rev. 191 (2007).
Abstract (from author):
This Article discusses strategies for advancing African-American economic interests through entrepreneurial ventures in the international marketplace. Part II begins with a discussion of the historical framework that examines the context of the slave trade, the colonial period, and the significant legislative and judicial opinions of the time. This part demonstrates the hostility that African-American entrepreneurs have encountered in the U.S. It also shows that both the government and judiciary, as evidenced by court decisions in the most recent affirmative action cases, have likely completed their efforts to amend this historically hostile treatment. Part III looks at how other races have accomplished similar objectives as those of African-Americans in spite of racism. At this point, this Article will discuss the Aga Khan-Ismaili approach, the Indian approach, and the Korean approach, along with their respective strengths and weaknesses. This section also looks at venture fundraising strategies employed by Korean entrepreneurs when attempting to establish their business in America's minority communities. Part IV proposes strategies for advancing African-American economic interests in the international marketplace. It begins by looking at the advantages and disadvantages of expansion and concludes with a discussion of the strategy African- American entrepreneurs should incorporate into a successful expansion.
Frank Pommersheim, Economic Development in Indian Country, What Are the Questions?, 12 Am. Indian L. Rev. 195 (1987).
Many tribes are impoverished and are in great need for some sort of economic development. However, many tribes have not found a venture that will truly help them to develop their economy and to gain a deeper sense of cultural meaning. Many of these ventures are unsuccessful because the tribes were looking to answer one question, how can we improve our economy? They do not consider the other questions that need to be addressed. This article seeks to explain some of the contours of the ‘right' questions by examining the context, goals, and strategies of development and the deeper concerns of culture and meaning.
Mildred Wigfall Robinson, Race, Gender, and Class at a Crossroads: A Survey of Their Intersection in Employment, Economics, and the Law, 14 J. Gender Race & Just. 431 (2011).
In this essay, the author focuses primarily on the current socio-economic condition of black Americans. The author argues that while the black middle class grew quite dramatically in the 1960s and 70s, the significant gap in wealth between white and black Americans persisted. Thus, the relative economic weakness of black, middle class Americans makes their economic circumstances more perilous in times of recession. Second, despite the gains made by women generally over the past fifty years, race still remains an important factor in their economic wellbeing.
W. Sherman Rogers, The Black Quest for Economic Liberty: Legal, Historical, and Related Considerations, 48 How. L.J. 1 (2004).
Abstract (from the introduction): This article canvasses the legal, historical, and other considerations that help to explain the current economic condition of African Americans in this country. The legal issues, however, are at the bottom of any analysis of this topic whether it be issues of sociology, economics, history, political science, or other disciplines. This Article maintains that any decision by the U.S. Supreme Court or any other entity with decision-making power which suggests the history of pervasive racial discrimination in the United States has ended will only prolong the day of economic liberty for many African Americans. Until African Americans and other disadvantaged groups become more connected to the American economic system, increases in the crime rate, continued social imbalance, and racial distrust should be expected. This article strongly suggests that African Americans must attempt to become economically independent, preferably as entrepreneurs, to the greatest extent possible regardless of the likelihood of business failure. The statistics suggest that the families of entrepreneurial African Americans fare better than those who assimilate into the job structure of the dominant culture. Accordingly, taking a chance in starting a business is probably better than never testing the waters.
Anthony D. Taibi, Banking, Finance, and Community Economic Empowerment: Structural Economic Theory, Procedural Civil Rights and Substantive Racial Justice, 107 Harv. L. Rev. 1465 (1994).
Abstract (from author):
Although civil rights discourse has often focused on material disparities and inequality, rarely has it critically examined the economic structures that systematically produce substantive injustices. In this Article, Professor Taibi both inspects and begins to move beyond the two dominant conceptions of civil rights -- which he labels the equality and affirmative action paradigms -- to question financial trends toward global and national instead of locally controlled banking institutions. He offers a community-empowerment perspective on the Equal Credit Opportunity Act, the Community Reinvestment Act, and recent legislative proposals for financial reform to direct attention to the limitations of traditional thinking about civil rights and to suggest ways to reorient future efforts.
Dana Thompson, L3Cs: An Innovative Choice for Urban Entrepreneurs and Urban Revitalization, 2 Am. U. Bus. L. Rev. 115 (2012).
Abstract (adapted from author): Social enterprises offer fresh ways of addressing seemingly intractable social problems, such as high levels of unemployment and poverty in economically distressed urban areas in the United States. Though there is not a singularly accepted legal definition of social enterprises, they are popularly known as businesses that use for-profit business practices, principles, and discipline to accomplish socially beneficial goals. Social entrepreneurs, those who operate social enterprises, eschew a traditional notion of charity, which primarily relies on charitable donations to eliminate societal ills and instead employ market-oriented strategies to achieve social good. Social enterprises blur the lines among the nonprofit, for-profit, and government sectors, and given their innovative and distinct characteristics, require new legal entities to meet their needs. New legal entity forms, such as the low-profit limited liability company (L3C), the benefit corporation, and the flexible purpose corporation, were created in response to the needs of social entrepreneurs for new legal entities, other than traditional for-profit and nonprofit entities, that can attract the necessary funding for their ventures while also achieving their social missions. As with other social entrepreneurs, minority urban entrepreneurs determined to use their businesses to make a profit and provide positive social outcomes in economically distressed urban areas also need innovative legal entities to attract funding and fulfill their social missions. The L3C, though needing changes to enhance its effectiveness, holds promise for minority-owned small businesses in urban areas with socially beneficial goals that are in need of capital to establish and to operate their businesses. It is important to establish viable minority-owned social enterprises in urban areas because many urban areas in the United States face substantial challenges, such as high levels of poverty and unemployment. Social enterprises in these areas could play a role in revitalizing these financially troubled urban areas by providing jobs to residents and needed revenues, products, and services to these areas.
R. H. Tipton III, Note, Microenterprise Through Microfinance and Microlending: the Missing Piece in the Overall Tribal Economic Development Puzzle, 29 Am. Indian L. Rev. 173 (2004)
Abstract (from the introduction): This comment discusses microfinance and microlending in general, providing both foreign and domestic examples of successful MFIs and explaining the different models of microlending. Part III proposes a hybrid model of microlending which is tailored to tribal institutions and is feasible, relatively simple and extremely practical. The final section discusses the positive effect a hybrid model could have on economic development on reservation land.
Rory Van Loo, A Tale of Two Debtors: Bankruptcy Disparities by Race, 72 Alb. L. Rev. 231 (2009).
Abstract (from author): This paper thus informs the relationship between bankruptcy and race and, as such, fleshes out some larger issues surrounding race and the law. Until now, that debate lacked empirical information about what happens to different races once in bankruptcy. It also lacked any clear assertion that race played a role in whether a debtor received a discharge. Indeed, much of the criticism of "raced" bankruptcy laws seemed understandably premised on the assumption of equal availability of a discharge. The data offered in this paper refute that assumption.
Jun Yu, Joyce Zhou, Yagang Wang & Youmin Xi, Rural Entrepreneurship in an Emerging Economy: Reading Institutional Perspectives from Entrepreneur Stories, 51 J. Small Bus. Mgmt. 183 (2013), available at http://ssrn.com/abstract=2235458.
Abstract (by authors): Rural entrepreneurs are of extreme importance in China's progress toward a more market‐oriented economy as the vast majority of Chinese live in rural areas. From an institutional perspective and based on content analysis of 91 publicly published stories about rural Chinese entrepreneurs broadcast by China Central Television, this paper addresses several key aspects of rural entrepreneurship in China and specifically probes into how different institutional elements (i.e., regulative, normative, and cognitive components) affect the strategic behaviors of rural Chinese entrepreneurs. We found that due to weak regulatory protection of intellectual rights, rural entrepreneurs in China tend to work on innovations on their own or with close family members instead of collaborating with external sources; these entrepreneurs use guanxi strategically to deal with constraints from the institutional environment; it is important to build legitimacy by either building alliances with large, established firms, or acquiring approval from people of authority.
Palestinian Small and Medium-Sized Enterprises: Dynamics and Contribution to Development, United Nations Conference on Trade and Development (2004).