Global Entrepreneurship through Brokerage: Connecting Socially Conscious North American Investors to South African Housing Developers

Abstract

The literature on global value chains and global production networks suggests limited entrepreneurial opportunities for small firms from developing countries. However, in networks power can accrue not only to central players (such as lead firms), but also to “marginal” players that can play a brokering role. Brokers get their power from connecting parties that would otherwise not be connected and firms that can bridge structural holes may well have impact beyond what would be suggested by their size. This chapter theorizes and provides evidence for global entrepreneurship through brokerage; when entrepreneurs recognize business opportunities in one context, can identify resources from another context, and can connect the two. Global entrepreneurship through brokerage can take place any time when entrepreneurs see opportunities that can be brokered between any two countries, but it takes a specific form in developing countries. A global entrepreneur can earn rents by bridging the gap between the resources of developed countries and the opportunities in emerging markets. This study examines a South African company providing low-cost housing with funds from socially responsible institutional investors, mainly from North America. The very different institutional conditions of the two contexts facilitate an understanding of how this type of entrepreneurship takes place.

Citation

Barnard, H. and Rosen, J. (2016), "Global Entrepreneurship through Brokerage: Connecting Socially Conscious North American Investors to South African Housing Developers", Global Entrepreneurship: Past, Present & Future (Advances in International Management, Vol. 29), Emerald Group Publishing Limited, Leeds, pp. 95-116. https://doi.org/10.1108/S1571-502720160000029008