The rise of Mexican entrepreneurial migration to the United States: A mixed‐embeddedness approach

• Author: Elizabeth Salamanca P.,Jorge Alcaraz
• DOI: http://doi.org/10.1002/tie.22014
• Published date: 01 March 2019
• Date: 01 March 2019

AREA PERSPECTIVES: LATIN AMERICA

The rise of Mexican entrepreneurial migration to the United

States: A mixed-embeddedness approach

Elizabeth Salamanca P. | Jorge Alcaraz

Department of International Business,

Universidad de las Américas Puebla (UDLAP),

Ex Hacienda Santa Catarina Mártir, Puebla,

Mexico

Correspondence

Elizabeth Salamanca P, Department of

International Business, Universidad de las

Américas Puebla (UDLAP), Ex Hacienda Santa

Catarina Mártir, San Andrés Cholula, Puebla

72810, Mexico.

Email: elizabeth.salamanca@udlap.mx

Funding information

The Puentes Consortium

Although many studies have analyzed the behavior of high-skilled migration to the United

States, few have focused on the escalating migration of Mexican entrepreneurs, and particularly

on the determinants of this kind of high-skilled migration. This article addresses this gap through

a qualitative approach conforming to quantitative procedures, based on 20 in-depth interviews

applied to Mexican entrepreneurs working and/or living in the United States. Theoretically, a

mixed-embeddedness approach guides this research because it allows examining both the indi-

vidual characteristics of Mexican entrepreneurs, and the influence of the home and host coun-

tries' institutional contexts on their business endeavors. Findings revealed Mexico's institutional

weaknesses, such as insecurity, corruption, and bureaucracy, are important drivers of migration

but so are the perception of a friendly U.S. fiscal system, the search for a better quality of life,

and the appeal of a more transparent business environment.

KEYWORDS

entrepreneurial migration, high-skilled migration, institutional voids, Mexico-United States

migration, mixed-embeddedness framework, opportunity migrants

1|INTRODUCTION

During the last two decades, the landscape of migration from Mexico

to the United States has changed. Affected by socioeconomic and

political dynamics in both countries, the profile of the migrant popula-

tion has become more diverse and complex (Consejo Nacional de

Población et al., 2014; Feliciano, 2008; Pandit & Holloway, 2006;

Rodríguez Gómez, 2009). While there is still a movement of less-

educated Mexicans to United States, contemporary migration includes a

growing flow of highly educated persons (Portes, Escobar, & Arana, 2009,

p. 104). Moreover, whereas the total number of Mexicans in United

States stopped growing or even declined in recent years, the skill edM exi-

can population continued to increase (Chiquiar & Salcedo, 2013, p. 12). In

fact, Tuirán and



Avila (2013) report Mexico is the Latin American country

with the highest number of qualified migrants to Organisation for Eco-

nomic Co-operation and Development countries, mainly United States.

According to the National Institute of Statistics and Geography (INEGI,

2016a), the proportion of Mexican migrants with high school and college

education went from 25.3% in 2008 to 31.9% in 2014.

This growth in skilled migration is linked to both strengths of the

U.S. institutional environment and to institutional weaknesses of

Mexico.

It is well known that in recent years the problem of drug traffick-

ing and organized crime has worsened in Mexico, causing a serious sit-

uation of widespread insecurity. The harmful effects of organized

crime have not only touched the different cartels that fight for power,

but also the government institutions and the society as a whole. One

of the sectors of the society most affected by organized crime has

been the high-skilled entrepreneurial class. In fact, INEGI (2016b)

reported in its 2016 National Survey of Business Victimization (ENVE)

that 35.5% of economic units (private businesses) in Mexico were vic-

tims of some crime in 2015. Moreover, more than half of the eco-

nomic units surveyed consider insecurity and crime as the problem

that most affects their business. Thus, entrepreneurs have become

one of the many targets of drug cartels that extort or kidnap or rob

them, taking advantage of the high level of impunity prevalent in Mex-

ico labeled by Campbell and Hansen as “absolute lawlessness”

(Campbell & Hansen, 2014, p. 163). Consequently, many of these

entrepreneurs have migrated to other countries, mainly to United

States, in search of a safer and more stable environment. In fact, the

number of entrepreneurs relocating to United States, which can be

tracked to some extent by the number of U.S. investor visas (E1/E2/

EB-5) granted to Mexican citizens, increased dramatically from 7,503

in 2006 to 65,625 in 2016 (U.S. Department of Homeland Security,

2017a, 2017b).

DOI: 10.1002/tie.22014

Thunderbird Int. Bus. Rev.. 2019;61:197–215. wileyonlinelibrary.com/journal/tie © 2018 Wiley Periodicals, Inc. 197

Despite the rising importance of high-skilled entrepreneurial

migration, studies about it are scarce, particularly so in the Latino case

(Chrysostome & Lin, 2010, p. 78; Cruz-Piñeiro & Ruiz-Ochoa, 2010;

Robles & Cordero-Guzmán, 2007, p. 18). This increased migration has

been often interpreted as a mechanism to escape from organized

crime but the literature has not further analyzed whether there are

other institutional weaknesses, which contribute to this migration.

Endemic corruption among both politicians and different players of

the private sector appears to contribute also to entrepreneurs' deci-

sion to move their businesses to United States because this institu-

tional weakness significantly increases transaction costs (Doh,

Rodrigues, Saka-Helmhout, & Makhija, 2017).

Therefore, it is appropriate to deepen the analysis of the reasons

that explain the increase of this type of migration by answering the

following questions: is insecurity the main institutional void motivat-

ing Mexican entrepreneurs to migrate to United States or are there

other institutional factors that contribute to this displacement? Do

institutional deficiencies of the Mexican context effectively explain

the increase in qualified business migration to United States or is it

rather the search for more profitable business opportunities?

This study contributes to answer these questions through the

application of the mixed-embeddedness approach, which allows

examining both the individual characteristics of Mexican entrepre-

neurs and the influence of the home and host countries' institutional

contexts on their business endeavors.

The analysis follows a qualitative approach conforming to quanti-

tative procedures (Welch & Piekkari, 2017), based on the application

of 20 in-depth interviews to Mexican entrepreneurs living and work-

ing in Texas. The findings reveal, apart from insecurity, there are other

relevant institutional weaknesses (corruption, bureaucracy, and fiscal

uncertainty) in Mexico that drive the migration of high-skilled entre-

preneurs, as well as attractive U.S. institutional conditions (friendly fis-

cal system, higher quality of life, a more transparent business

environment) that appeal and retain them.

2|THEORETICAL FRAMEWORK AND

RESEARCH QUESTIONS

2.1 |High-skilled (entrepreneurial) migration

There is no consensus in the literature when defining “high-skilled

migration”due to the complexity of the term. As suggested by Koser

and Salt (1997, p. 287), this term implies the interplay of three con-

ceptual bases: the migrant, the state, and the employer. For the pur-

poses of this article, “high-skilled migration”is understood as people

who have a tertiary educational qualification or its equivalent

(Koser & Salt, 1997, p. 287), and who bring valuable skills that are in

short supply in the host country (Brücker, Bertoli, Facchini, Mayda, &

Peri, 2012). Migrants with a solid educational and labor background

comprise an appealing group to their host economies due to their high

rate of mobility and their significant contribution to the local econ-

omy. They tend to hold very specialized skills and occupations, and

comprehend a broad set of individuals such as scholars, professionals

(lawyers, physicians, architects, scientists, etc.) organizational and self-

initiated expatriates, and entrepreneurs. They face low formal barriers

to migration and are less financially constrained than traditional

migrants are (Parey, Ruhose, Waldinger, & Netz, 2017).

Although much of the literature shares the view that migrants are

more likely to engage in entrepreneurial activity as a means of upward

social and economic mobility (Light, Savagh, Bozorgmehr, & Der-Mar-

tirosian, 1994), most of the high-skilled migrants are not necessity-

based but an opportunity-based group, as they are looking for a prof-

itable business environment. Chrysostome (2010, p. 138) defines a

migrant entrepreneur as one who freely decides to start a business to

take advantage of an opportunity. Migrant entrepreneurs are distin-

guished not only by their migration channels but also by their differing

motivations, destinations, and mobility patterns (Tseng, 2000, p. 150).

Thus, they constitute a very heterogeneous group whose profile,

experiences, and contributions to both the home and the host coun-

tries significantly vary. The nature of their business also varies

depending on their decision of addressing and operating the business

within the ethnic community or broadening it to the mainstream econ-

omy (Mustafa & Chen, 2010). In this sense, Ndofor and Priem (2011,

p. 794) suggest migrant entrepreneurs possessing high economic capi-

tal are more likely to favor dominant market strategies. As stated by

Echikson (2000), migrant entrepreneurs contribute to economic reac-

tivation and to the social invigoration of host communities.

Entrepreneurial migration to United States has significantly grown

during the last few decades. In fact, immigrants constitute 16.3% of

the total US work force, implying a higher business ownership rate

than the US born rate, and they represent 24.9% of all new business

owners in United States (Fairlie & Lofstrom, 2015). Furthermore, Fair-

lie and Lofstrom (2015) underline the fact that immigrant-owned busi-

nesses are found to make large contributions to total employment in

United States; they hire an average of eight employees each. In terms

of wealth derived from entrepreneurial activity, Fairlie and Lofstrom

(2015, p. 31) report average earnings of immigrant-owned businesses

are lower than for natives but these earnings tend to rise with time in

the host country.

2.2 |Distinctiveness of high-skilled Mexican

migration to United States

The Latin American and Caribbean region has been very dynamic in

terms of high-skilled migration. Lozano-Ascencio and Gandini (2010)

found out this region experienced the highest world growth of skilled

migration between 1990 and 2007; they confirmed this result in a

later study (Lozano-Ascencio & Gandini, 2011, p. 686) determining

that, between 1990 and 2008, high-skilled migration increased by

164% in this region.

A key factor that distinguishes Latino migrants from other migrant

groups is the hostile home institutional context most Latinos face.

Migrants coming from emerging markets face a home environment

characterized by “the absence of specialized intermediaries, regulatory

systems, and contract-enforcing mechanisms”(Khanna, Palepu, &

Sinha, 2005, p. 63), labeled as institutional voids by Khanna and

Palepu (1997). Nonetheless, the influence exerted by organized crime

on Latin American formal and informal institutions is so powerful that,

in some cases, organized crime cells have become pseudo

198 SALAMANCA P. AND ALCARAZ