Native and immigrant entrepreneurship. Costs of doing business and local liabilities

The chapter introduces the new concept of “local liabilities” in relation to native and immigrant entrepreneurship, and it draws on the concept of liability that is connected to the additional costs, difficulties and probability of failure faced by a firm with respect to its competitors in domestic and foreign markets. This chapter presents the case of Chinese entrepreneurship in the area of Prato, known as one of Italy’s main industrial district, in which native and immigrant entrepreneurs coexist, facilitating the emergence of local liabilities referable mainly to elements of foreignness and outsidership. An emblematic case of a native firm interacting with Chinese entrepreneurship is also presented. The case of Prato shows that liabilities typical of internationalization processes affect also domestic – native and immigrant – firms in a local setting. Thus, it is proposed that local liabilities may arise in situations similar to those in Prato, where two (or more) separate communities (of persons and firms) exist, and the larger is the separation between the communities, the larger are the local liabilities. Such liabilities stem from the process of globalization that builds “bridges” between distant contexts, but also creates these sorts of liabilities at the local level.