Religion as an explanatory variable for entrepreneurship

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Religion as an explanatory variable
for entrepreneurship
Leo Paul Dana

Abstract: Religions are depositories of values. Reviewing literature from
the past century, this article argues that there is considerable empirical
support for the thesis that religion and related beliefs influence values and
thus shape entrepreneurship. This article shows that: (1) various religions
value entrepreneurship to different degrees; (2) different religions yield
dissimilar patterns of entrepreneurship; (3) specialization along religious
lines shapes entrepreneurship; (4) credit networks, employment networks,
information networks and supply networks of co-religionists affect entre-
preneurship; (5) religions provide opportunities for entrepreneurship; (6)
religious beliefs may also hamper entrepreneurial spirit; and (7) religions
have built-in mechanisms for the perpetuation of values. Regardless of
whether a person is religious, he or she is influenced by the values propa-
gated by religion.
Keywords: belief systems; asceticism; frugality; religion; thrift; values
Professor Leo Paul Dana is with the Department of Management, University of Canterbury, Private
Bag 4800, Christchurch, New Zealand. E-mail: leo.dana@canterbury.ac.nz. He is currently on study
leave at the GSCM-Montpellier Business School, France.

People with different cultural beliefs and religious             of non-economic factors, such as the legitimacy of
values have looked at entrepreneurship with varying              entrepreneurship, for entrepreneurial activity. Specht
degrees of legitimacy. The Greek philosopher Aristotle           (1993) emphasized the importance of cultural accept-
(384–322 BC), a student of Plato and teacher of Alexan-          ance. Cultural acceptance of entrepreneurship varies
der the Great, viewed entrepreneurship as unnatural and          among people with different cultural values. Likewise,
therefore illegitimate (Aristotle, 1924). Becker (1956)          people from different religious backgrounds have
explained that some cultures consider business an                dissimilar propensities to become entrepreneurs.
unholy occupation. Woodrum (1985) found participation               Farmer and Richman (1965, p 157) wrote,
in religious activities to be a predictor of entrepreneurial
success among Americans of Japanese origin. Dana                    ‘There is a close correlation of countries in terms of
(1995a) and Lumpkin and Dess (1996) maintained that a               how deeply the Calvinist spirit has penetrated their
small firm’s orientation was grounded in the values of its          economic and social behavior with real per capita
entrepreneur.                                                       income and level of economic development. Thus, in
   Values and culture shape the environment for entre-              1958, all fifteen countries of the world with per
preneurship as well as the entrepreneurial event. Aldrich           capita incomes of over $700 per year were those
(1979) noted that the environment could provide or                  which had followed the Calvinist ethic extensively;
withhold resources. From an anthropological perspec-                and, with the possible exceptions of France and
tive, Stewart (1991) suggested that the legitimization of           Belgium, all were quite extensively Protestant in
enterprise was a function of culture. From a sociological           religion. No country where the Calvinist ethic had
perspective, Reynolds (1991) confirmed the importance               deeply penetrated was not included in this list of

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Religion and entrepreneurship

     most wealthy countries, while none of the extensively   prohibit entrepreneurship. Rather, religions teach,
     non-Calvinist nations had yet achieved such eco-        promote and propagate cultural value systems within a
     nomic success.’                                         given society. Value orientations in turn affect propen-
                                                             sity towards entrepreneurial activity. For instance,
More recently, Enz, Dollinger and Daily (1990) identi-       Methodism accepts disparity between the rich and poor.
fied different value orientations among various              The wealthy may be charitable, and it can be argued that
communities, and concluded that value orientation            acquisition of wealth is good in that it allows one to be
might be an important component in entrepreneurs.            philanthropic. Asa Chandler, the pharmacist who
Some cultures simply value entrepreneurial activity          incorporated the Coca-Cola Company, was a devout
more than do others, and empirical evidence suggests         Methodist and Sunday school teacher who believed that
that some religions are less conducive to entrepreneur-      making money was a form of worship. During the
ship than others.                                            following century, Prime Minister Margaret Thatcher
   The Government of Canada found that 18 per 1,000          (raised with strict Methodist values)1 stated, ‘I believe in
Filipino workers in Canada were self-employed; it also       “Judaeo–Christian” values: indeed my whole political
reported that 124 per 1,000 Greek workers in Canada          philosophy is based on them’ (Thatcher, 1993, p 509).
were self-employed (Dana, 1991). How can such                She emphasized that her political party originated as a
differences be explained? Could it be that the Greek         Christian party, concerned with the church and the state
Orthodox religion inculcated certain values among            in that order, and she stated that religion was the source
members of one group? Indeed, the world view of Greek        of a nation’s values.
Orthodoxy fosters a work ethic and leadership style that        Candland (2000) viewed faith as social capital and
may facilitate successful entrepreneurship.                  Brammer, Williams and Zinkin (2007) found that
   Galbraith, Latam and Galbraith (1997) examined            religious individuals tended to hold broader conceptions
differences and similarities in attitudes and cultural       concerning the social responsibility of businesses than
norms between two groups in the USA: Catholic                non-religious individuals. Anderson, Drakopoulou Dodd
Hispanic entrepreneurs and non-Hispanic entrepreneurs;       and Scott (2000) suggested that a reduction in church
this study hypothesized that the first group consisted of    attendances could not be seen to be a direct consequence
hybrid personae, combining aspects of the traditional        of a reduction in religiosity. Regardless of whether a
notion of the entrepreneur while retaining important         person is religious, it can be argued that individuals are
cultural characteristics of the Hispanic community. The      influenced by cultural values propagated by religions.
authors found that successful Hispanic entrepreneurs         As suggested by Anderson, Drakopoulou Dodd and
were also leaders in their Hispanic community; business      Scott (2000), it seems reasonable to assume that religion
leaders were often leaders in the religious realm.           has an impact upon the legitimization of enterprise,
   Studies that investigate entrepreneurship as if it were   despite secularization.
an isolated phenomenon – derived from the self and              In this article, the author combines three decades of
based on the psychological traits of the entrepreneur –      personal studies and a review of the literature to discuss
risk ignoring important causal variables arising from the    ways in which religion shapes entrepreneurship. Blend-
environment, including the religious milieu. As sug-         ing a sociological understanding of values with an
gested by Drakopoulou Dodd and Anderson (2007), the          anthropological interpretation of culture, it will be
dynamics of embeddedness and social conditioning             suggested that religion is a vehicle to perpetuate both
should be attributed equal weight to the entrepreneur’s      values and culture, thus shaping various forms of
individual agency. Religions are depositories of wisdom      entrepreneurship. It will be shown that: (1) various
and of values; furthermore, religious beliefs are inter-     religions value entrepreneurship to different degrees; (2)
twined with cultural values. Are prevailing religious        different religions yield dissimilar patterns of entrepre-
beliefs explanatory variables for a propensity for, or       neurship, possibly due to value differences (such as
indifference about, entrepreneurship? Empirical findings     asceticism, frugality and thrift) but also due to speciali-
suggest a causal relationship.                               zation (sometimes resulting in a monopoly) and
   Drakopoulou Dodd and Gotsis (2007) provided a             networks; (3) specialization along religious lines shapes
literature review addressing implications of religious       entrepreneurship; (4) credit networks, employment
convictions in business settings. Religious beliefs – and    networks, information networks and supply networks of
cultural values deriving therefrom – influence the social    co-religionists affect entrepreneurship; (5) religions
desirability of entrepreneurship and its nature as well.     provide opportunities for entrepreneurship; (6) religious
Drakopoulou Dodd and Gotsis (2007) categorized               beliefs may hamper entrepreneurial spirit; and (7)
individual outcomes of religious belief.                     religions have built-in mechanisms for the perpetuation
   A religion does not necessarily directly promote or       of values.

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Values and culture                                           order and direction to the ever-flowing stream of human
                                                             acts and thoughts as these relate to the solution of
Feuerbach (1855) argued that religion included values
                                                             “common human” problems’ (Kluckhohn and
produced by people in the course of their cultural
                                                             Strodtbeck, 1961, p 4). They suggested that cultures
development. Durkheim (1912) and Thomas and
                                                             could be classified according to five value orientations:
Znaniecki (1918) were among the pioneers who studied
                                                             time; humanity and the natural environment; relating to
the concept of values. David Emile Durkheim, son of
                                                             other people; motive for behaving; and the nature of
Rabbi Moise and Melanie Durkheim of Epinal, is well
                                                             human nature. During the same decade, Farmer and
known for his work The Elementary Forms of Religious
                                                             Richman (1965, p 157) suggested that religious beliefs
Life (Durkheim, 1912). In this, he identified a pattern of
                                                             ‘usually have a direct and very significant bearing on the
organization consistent within all human societies; for
                                                             dominant view toward work and achievement’.
this pattern, he used the term Structural Functionalism.
                                                                Shortly thereafter, Rokeach (1968, p 124) defined a
In essence, his theory described society as being built
                                                             value as ‘a type of belief, centrally located within one’s
upon order that incorporates interrelationship and
                                                             total belief system, about how one ought or ought not to
balance among various parts of its constitution; he
                                                             behave, or about some end-state of existence worth or
argued that the construction and identity of any given
                                                             not worth attaining’. Rokeach (1968) considered two
society was based on shared norms and values as the
                                                             sets of values: terminal values and instrumental values.
basis of existence.
                                                             Terminal values are cultural goals to be attained and
   One of two major macro-sociological perspectives,
                                                             developed, while instrumental values are the means of
functionalism conceives society as a system of interre-
                                                             achieving the desired goals. Rokeach (1973, p 5)
lated parts in which no part can be understood in
                                                             provided a new rendition of values and value systems:
isolation from the whole. A change in any part is seen as
leading to a degree of imbalance that changes other parts
                                                                ‘A value is an enduring belief that a specific mode of
of the system and at times the system as a whole.
                                                                conduct or end-state of existence is personally or
Functionalism places a great emphasis on values in
                                                                socially preferable to an opposite or converse mode
terms of the functions they perform in a socio-cultural
                                                                of conduct or end-state of existence. A value system
system. As such, it contrasts directly with the other
                                                                is an enduring organization of beliefs concerning
major macro-sociological perspective, conflict theory.
                                                                preferable modes of conduct or end-states of exist-
   Sociology as well as anthropology provided early
                                                                ence along a continuum of relative importance.’
definitions. From a sociological perspective, Thomas
and Znaniecki (1918, p 21) interpreted a value as having
                                                             Hiebert (1976, p 25) defined culture as ‘the integrated
an acquired social meaning and, consequently, ‘is or
                                                             system of learned behaviour patterns, ideas and products
may be an object of activity’. Clyde Kluckhohn pro-
                                                             characteristic of a society’. Hofstede (2001, p 5) defined
vided an anthropological definition of culture as the
                                                             a value as: ‘a broad tendency to prefer certain states of
total life way of a society; he emphasized that
                                                             affairs over others’. Relying heavily on culture and
each culture was formed by values that the people
                                                             values as key constructs, he stated that ‘values are held
from that culture considered as being normal. He
                                                             by individuals as well as by collectivities; culture
defined a value as a ‘conception, explicit or implicit,
                                                             presupposes a collectivity’ (Hofstede, 2001, p 5).
distinctive of an individual or characteristic of a group,
                                                             Schwartz (1992) focused on a variety of values, includ-
of the desirable which influences the selection from
                                                             ing: achievement; benevolence; conformity; hedonism;
available modes, means and ends of action’ (1951, p
                                                             power; security; self-direction; and tradition. Some of
395). Kluckhohn’s theoretical development was pub-
                                                             these values may be influential in determining the social
lished in two famous books, Mirror for
                                                             desirability of entrepreneurship and the nature of
Man (Kluckhohn, 1949) and Culture: A Critical Review
                                                             entrepreneurial activity.
of Concepts and Definitions (Kroeber and Kluckhohn,
1952). Trying to put Clyde’s theory into practice, his
wife, Florence, studied Indigenous Americans and co-         Findings
authored a publication with Fred L. Strodtbeck
(Kluckhohn and Strodtbeck, 1961). These authors              Various religions value entrepreneurship to different
defined value orientations as ‘complex but definitely        degrees
patterned (rank-ordered) principles, resulting from the      Over the years, numerous empirical studies have
transactional interplay of three analytically distinguish-   reported on the influence of religion on the economy or,
able elements of the evaluative process – the cognitive,     more specifically, that some religions are more repre-
the affective, and the directive elements – which give       sented than others in entrepreneurship and/or the small

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business sector. Classical social theorist Max Weber          appears as the religion least conducive to capitalism.
(1904) compared taxation figures in Baden, and reported       Muslims are very much against competition, against
an average of 589 marks per Catholic, 954 marks per           private property and less willing to trade off equality for
Protestant, and 4,000 marks per Jew; he argued that           incentives’ (Zingales, 2006, pp 228–229). In contrast,
while Protestantism stressed the development of eco-          Badawi (2006, p 208) suggested that ‘Islam preaches a
nomic security, Catholics believed that it was easier for a   holistic and comprehensive notion of development in
camel to fit through the eye of a needle than for a           this world and for the hereafter. It does not negate the
wealthy man to go to heaven.2 Weber also studied how          pursuit of material development in this world … The
religion affected the emergence of entrepreneurship in        teachings of Islam are also eminently suited to develop-
India; he explained that the Jains, an ascetic religious      ment in the modern, knowledge-based economy …
sect, became a trading sect for purely ritualistic reasons,   Besides its emphasis on knowledge, Islam also enjoins a
as only in trading could one practise ahimsa, the             work ethic that equips the individual to excel in eco-
absolute prohibition of the killing of live things. In        nomic pursuits.’ Arslan (2000) tested whether Muslims
contrast, Theravadism, as practised in Laos, discourages      exhibited some values that corresponded to those
entrepreneurial behaviour and the result is a relative        encouraged by the Protestant work ethic; using
absence of Lao men in entrepreneurial activity (Dana,         multivariate and univariate analysis of variance, the
1995b).                                                       study found high Protestant work ethic scores among
   ‘Some cultures that value entrepreneurship,’ wrote         Turkish Sufis.
Shapero, ‘are the … Jains …Jews… Mennonites and                  In a study of Mennonite entrepreneurs in Paraguay
Mormons …’ (1984, p 26). Writing about Estonia after          (Dana and Dana, 2007, p 82), it was found that the
its independence from the Russian Empire, Liuhto              Mennonite religion ‘values asceticism, frugality and
(1996, pp 317–329) noted that ‘another interesting detail     thrift, but not private property. Entrepreneurship takes a
from the statistics is the considerable share of the          collective form and cooperatives are important eco-
companies classified as Jewish’. Analysing the Middle         nomic vehicles, providing jobs for indigenous workers
East after the Second World War, Sayigh (1952) found          and markets for the produce of self-employed farmers.
Christians and Jews to be the prominent entrepreneurs         While Mennonite cooperatives thrive here, Indian
of Lebanon. Gadgil (1959) noted that Muslims, Chris-          cooperatives modelled after them have not had the same
tians and Jews were the chief traders of Kerala in South      levels of success.’
India. Lasry (1982) noted the percentage of entrepre-            In the words of Lewis (1955, p 105),
neurs among Sephardic Jewish immigrants in Montreal
as being significantly higher (38%) than among immi-             ‘If a religion lays stress upon material values, upon
grants to Canada in general. Jenkins (1984) showed that          thrift and productive investment, upon honesty in
Protestants in Northern Ireland manipulated ethnicity in         commercial relations, upon experimentation and risk-
the realm of economic transactions, and thus dominated           bearing … it will be helpful to growth, whereas in so
the economy there. In Germany, Klandt (1987, p 31)               far as it is hostile to these things, it tends to inhibit
found that a Protestant upbringing was ‘more likely to           growth.’
lead to independent business activity than a Catholic
upbringing’. In the UK, Quakers have been (Corley,
1998) and continue to be (Ackrill and Hannah, 2001)           Different religions yield dissimilar patterns of entrepre-
overrepresented in the realm of enterprise. In the USA,       neurship
Kraybill and Bowman (2001) and Kraybill and Nolt              A contemporary of Weber, Sombart (1911) observed
(1995) identified a causal relationship between religion      that the economic centre of Europe shifted with the
and self-employment among the Amish.                          migration of Jews; he linked economic development in
   In a study of attitudes, Guiso, Sapienza and Zingales      Europe to Jewish entrepreneurs.3 Across the Atlantic,
(2003, p 228) noted that ‘with the exception of Bud-          William Howard Taft (1919, p 7), former President of
dhists, religious people of all denominations are more        the USA, suggested that Jews ‘developed trade, poetry,
inclined to believe that poor people are lazy and lack        philosophy, science and literature’. Taft (1919, p 10)
will power’. Zingales (2006, p 228) suggested that            also gave examples of how Europeans had prospered by
‘Buddhism and Christianity seem most conducive to             means of Jews, who ‘were forbidden to hold land. The
capitalism, and Islam the least’. ‘Comparing the average      nobility manufactured the liquor, and they were willing
response of different religious denominations,’ he            and anxious to have the Jews sell it, who thus, for lack
elaborated, ‘we find that, other things being equal,          of other occupation, became the innkeepers, the purvey-
Buddhism seems to promote the best attitudes towards          ors in the demoralizing liquor business.’
the market system. Christian religions follow … Islam            In a landmark study comparing different religious

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groups in New York City, Glazer and Moynihan (1963,            animal feed. The French offered protection to these
pp 147–148) noted,                                             people who supplied their army and this led to a mass
                                                               immigration of Jews from central Europe, to Alsace.’
  ‘Jews already constitute a majority of those engaged         (Dana, 2006, p 589)
  in many businesses … In the great banks, insurance
  companies, public utilities, railroads, and corporate     Controlling for climate, geographic position and other
  head offices that are located in New York, and in the     factors, Baldachino and Dana (2006) compared entre-
  Wall Street law firms, few Jews are to be found…          preneurship in French St. Martin with that in Dutch Sint
  Obviously, in addition to discrimination, one must        Maarten, the latter more influenced by a Protestant work
  also reckon with taste and tradition among Jews,          ethic. While two cultures share a little island, colonial
  which may have had their origin in discrimination,        influences have been different, and the entrepreneurship
  but which may now lead a good number of Jews              sector reflects this. While Dutch Sint Maarten is home to
  voluntarily to avoid huge bureaucratic organizations      prosperous traders, French St. Martin is home to self-
  in favour of greater freedom in small companies, as       employed farmers.
  independent entrepreneurs…’
                                                            Specialization along religious lines shapes entrepre-
Iyer (1999, p 103) noted,                                   neurship
                                                            In some cases, certain religious groups specialized in
  ‘The case of Indian business communities is slightly      specific economic sectors. For two centuries, Quaker
  different from the generalized pattern observed for       entrepreneurs including John Cadbury, Joseph Fry and
  the rest of Asia, especially in that such business        the Rowntree family dominated the chocolate industry
  communities have traditionally evolved within             across England. Cadbury flourished in Birmingham, Fry
  specific religions and castes. Moreover, the religion     blossomed in Bristol, and the Rowntrees prospered in
  of the Indian merchant community, in contrast to the      York. John Cadbury expanded his business when he
  general strictures on wealth and profits as in other      invited his brother Benjamin to join him in 1847;
  religions (including Asian religions, such as Confu-      employees were well cared for, in accordance with
  cianism), treats money as neutral and does not            religious values.
  condemn wealth generation itself. This has important         During the mid-nineteenth century, Seventh-day
  implications in the ways the Indian merchant com-         Adventists in the USA – preaching vegetarian values –
  munity assimilates the contradictory objectives of        established the Western Health Reform Institute, later
  wealth creation and frugality with religious piety that   renamed the Battle Creek Sanitarium, in Battle Creek,
  serves to enhance market reputation.’                     Michigan. Aligned with the beliefs of Sylvester Graham
                                                            (the minister who invented the Graham cracker),4
Circumstance led Jews to become merchants in Alsace:        patients were required to adhere to strict diets. The
                                                            superintendent was a fervent Seventh-day Adventist, Dr
  ‘Their religion prevented them from working on            John Harvey Kellogg, who with his brother William
  Saturday, and the Church forbade them labouring in        Keith Kellogg invented the modern breakfast cereal, in
  their fields on Sundays. The Church also banned           line with their religious beliefs. Kellogg’s thus began
  them from giving employment to Christians. In             with 44 employees in Battle Creek, Michigan. A patient,
  addition, experience taught the Jews that, in times of    Charles William Post, founded a competing manufac-
  religious persecutions, it was more convenient to         turer and launched the first nationwide advertising
  have moveable assets, such as gold, cattle and later      campaign in the USA. In Australia and New Zealand,
  diamonds, than to own immovables … By the                 the Seventh-day Adventist Church also had connections
  fourteenth century, Jews no longer had a choice;          to the cereal sector; important players included Grain
  under the Saxon civil code, Meißener Rechtsbuch,          Products and Sanitarium.
  Jews were banned from owning land. Yet, in Alsace,           In Canada, meanwhile, Methodist entrepreneurs
  this did not lead to urbanisation, because Jews were      established large department stores. In 1869, Timothy
  not allowed to live in the cities. Alsace remained part   Eaton opened a store introducing fixed prices and cash
  of the Holy German Empire until being acquired in         sales (as opposed to negotiated prices and credit sales),
  1648, by the Kingdom of France. At the time, the          soon expanding into the Eaton’s chain; he introduced the
  French army was facing a shortage of horses, and a        mail order catalogue to Canadians in 1884. Robert
  lack of animal feed for the horses it had. The Jews of    Simpson opened his first department store in 1872, and
  Alsace, with their experience in commerce, effi-          this also developed into a national chain of department
  ciently supplied the French with horses and with          stores. Norcliffe (2001) noted that Toronto’s principal

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bicycle manufacturers during the late nineteenth century           building boom that has transformed Manhattan, most
were owned by Methodists, including the Flavelle,                  of the big builders have been Jews: Uris Brothers,
Harris and Massey families.                                        Tishman, Erwin Wolfson, Rudin, Webb and Knapp
  Fishberg (1911, p 531) observed that Jews were                   (Zeckendorf)…The finest of the postwar office
concentrated in precarious occupations such as com-                buildings, Seagram’s, which is perhaps the most
merce; he suggested that Jews were ‘ambitious and                  lavish and expensive in use of space and detail, was
persevering, possessing an enormous amount of “push”,              erected by a company headed by a Canadian Jewish
which he cannot always bring into play while struggling            communal leader, Samuel Bronfman…’
against adverse circumstances’. Raphaël (1980) noted
the clustering of Jews in the livestock trade in Alsace.        ‘Amish entrepreneurs,’ wrote Hawley, ‘tend to cluster
Dana (2006, p 590) wrote,                                       heavily in certain small business ventures. This phenom-
                                                                enon can best be described by order of the Ordnung,
     ‘Still forbidden to own land, deprived of entry into       which requires that the Amish establish only those stores
     universities, excluded from the guilds and not             and small businesses that meet the product and service
     allowed to reside in cities, these people tended to be     needs of the Amish community’ (1995, p 320). ‘In order
     travelling merchants, linking the urban and rural          to maintain their values,’ explained Dana (2007b, p
     economies. In September 1791, Jews were permitted          142), ‘the Amish try to avoid close contact with people
     to reside in the cities of Alsace, and this helped them    who do not hold the same traditions. Furthermore, due
     expand their commercial networks … The fathers and         to religious discrimination in the past, the Amish often
     elder brothers would carry their loads on backs. This      exhibit a mistrust of outsiders. The primary motive of
     included utensils, candles and soap, as well as animal     self-employment among the Amish is neither profit nor
     hides, laces, string and used clothing. Wealthier          prestige, but rather the maintenance of cultural values,
     merchants used man-powered pushcarts. The excep-           separately from mainstream society such as to empha-
     tions were those known as Esselje´de (donkey-Jews),        size humility over pride.’ Such segregation from
     as they would travel from one village to another with      mainstream society helps the Amish retain social capital,
     a donkey-drawn cart; they traded kitchenware and           and this supports Borjas (1992), who analysed ethnic
     other household items, accepting rags and beehives         capital and the value of isolation.
     as payment. Livestock merchants constituted a class           An ethnographic study of Morocco (Dana and Dana,
     of their own. Some had a horse-drawn wagon on              2008, p 215) noted that some goods ‘were sold only by
     which two calves could be transported. At the end of       Jews while others were sold only by Muslims. Silver-
     the nineteenth century, Jews had a monopoly in cattle      smiths were invariably Muslim, while goldsmiths were
     dealing in areas of Baden, Bavaria, Hanover,               Jewish. Jews were also very active in the spice trade,
     Rhineland and Westphalia. Until the First World War,       and they specialised in the socio-economic function of
     most independent cattle dealers in Germany (includ-        distribution … Many Jews were peddlers, or suppliers to
     ing Alsace) were Jewish.’                                  other vendors, inland. They served as Barthian middle-
                                                                men.’
Based on oral testimonies of retired entrepreneurs and
verified by means of triangulation, Dana (2006) pro-            Credit networks, employment networks, information
vided an account of the livestock distribution system,          networks and supply networks of co-religionists affect
which prevailed in Alsace until the Second World War.           entrepreneurship
In this region of traditional rivalry between French and
Germans, the sector was dominated by Jewish entrepre-           Credit networks. Credit is at times linked to marriage
neurs speaking Jédich-Daitch, serving as a middleman            within the Jain community. Dundas (1992) discussed
minority and dealing between French-speakers and                carefully regulated marriage alliances among Jains, and
German-speakers, who did not trade with one another.            Laidlaw (1995, p 355) further explained that when a
   In their study of New York City, Glazer and                  Jain ‘family contracts a good marriage, its credit
Moynihan (1963, p 151) found more evidence of                   increases’. Iyer and Shapiro (1999) refer to credit
clustering:                                                     networks among Koreans and Chinese in the USA.
                                                                   Juteau and Paré (1996) refer to credit networks of
     ‘Merchandising, garment manufacturing, and enter-          Jewish entrepreneurs in Canada. Likewise, Dana (2006)
     tainment maintain their importance, but to them has        noted that Jewish cattle dealers relied heavily on other
     been added a sizable range of light manufacturing,         Jews for financing. Co-religionists provided finance
     and real estate and building. In the latter, especially,   when needed. ‘A network of livestock merchants, across
     Jews play a prominent role … In the great office-          the region, facilitated the dissemination of knowledge

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and availability of finance among co-religionists. In the     urban economies,’ wrote Dana, ‘providing cash for
event of bankruptcy, an individual was given assistance       farmers and a source of meat for consumers. In addition,
by other merchants’ (Dana, 2006, p 594).                      they spread information as required. If one farmer
   Discussing Jewish and Muslim entrepreneurs in              needed a bull, temporarily, for breeding purposes, a
Morocco, Dana and Dana (2008, p 215) noted that               livestock merchant could source this need’ (Dana, 2006,
‘merchandise was often purchased on credit, thereby           p 590). There were also individuals who specialized in
requiring a relationship of trust between supplier and        information:
peddler’. Again, there was often dependence on co-
religionists for finance. In a study of Catholic Hispanics,      ‘Some Jews did not themselves deal with livestock,
Galbraith, Stiles and Benitez-Bertheau (2004) suggested          but served as brokers, or informers who simply sold
that a co-ethnic capital market appeared to be the last          information which would lead to transactions. These
dimension developed within an ethnic community.                  entrepreneurs were called Schmüsser, and their
                                                                 commission was referred to as Sassergeld. Operating
Employment networks. Porter (1937) noted that entre-             informally, these individuals mingled with the
preneurs were giving preference to members of their              villagers, identified needs and opportunities and then
immediate circle rather than giving equal opportunities          waited by the side of a road, knowing that livestock
to outsiders. Raistrick (1950) found Quakers to be               merchants would be passing by eventually. The
clannish and nepotistic. Kraybill and Nolt (1995)                Schmüsser then sold their information to livestock
observed that Amish entrepreneurs gave preference in             merchants. (The word they used for this activity was
business to co-religionists. Dana’s (2007b, p 146)               vermassere, literally meaning “to inform”.) In order
ethnographic study explained the reason behind this:             to reduce time spent away from their own villages,
‘While the Amish people believe that a community of              the transient merchants preferred to pay for this
voluntary believers is the context for life, the fundamen-       market research, rather than to conduct this time-
tal unit of Amish society and of their economy is the            consuming task themselves. The Schmüsser thus
family … home-based enterprises allow family members             formed an integral part of the business network.’
to work together, reinforcing the Amish family unit’.            (Dana, 2006, pp 592–593)
Galbraith, Latam and Galbraith (1997) found that
successful Hispanic entrepreneurs, often holding                 Likewise, in his study of 1,200 Muslim entrepreneurs
important leadership roles in the local Catholic Church,      in London, Altinay (2008) found a strong relationship
were actively finding employment for other recent             between religion and advice-seeking practices. One
immigrants. Galbraith, Stiles and Rodriguez (2003) and        interviewee stated, ‘If people from the same religion and
Stiles, Rodriguez and Galbraith (2007) suggested that         the background do not help and support each other, who
Catholic Hispanic and Muslim Arab entrepreneurs were          else would do so?’ (Altinay, 2008, p 120). Altinay
both dependent on co-ethnic business in their respective      (2008) found that Muslims who practised5 their religion
enclaves, relying upon co-religionists for labour,            relied more on advice from co-ethnics.
especially at the start-up phase. In Malaysia, Abdullah
(1992) found that Muslim Malays expressed strong              Supply networks. Juteau and Paré (1996) and Lee
preferences for employing Muslim candidates over non-         (1999) found that co-ethnic suppliers were prevalent
Muslims. In a study of Turkish entrepreneurs, Altinay         among Jewish entrepreneurs in Canada and the USA
(2008) likewise found a strong relationship between the       respectively. Lee (1999) noted that this provided access
religion of an entrepreneur and recruitment.                  to lower wholesale costs, which could translate to lower
                                                              retail costs and enhanced competitiveness. Galbraith
Information networks. Apart from co-religionist               (2007) examined buyers and sellers among two groups:
networks that provide credit or preferential treatment for    Catholic Hispanics and Muslim Arabs within a US
employees, information networks also appear in the            metropolitan area; he suggested that the perceived
literature and these are sometimes comprised of co-           advantage of intra-enclave buying and selling lay in a
religionists. Boissevain and Grotenbreg (1987, p 117)         sense of ethnic identification that came primarily from a
observed that ‘Hindustanis appear to have a larger            religion, either Catholic or Muslim, common to each
network of relatives than do Chinese and Creole busi-         enclave.
nessmen. Given the value they attach to family loyalty,
this seems to indicate that Hindustanis have access to a      Religions provide opportunities for entrepreneurship
wider information and support network.’                       Religious values may create needs, and these can
   A co-religionist information network existed in            sometimes be translated into opportunities for entrepre-
Alsace. ‘They managed the link between the rural and          neurship. When Toronto observed a day of rest and

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Religion and entrepreneurship

streetcars were prohibited on Sundays while bicycles           (Leviticus, 11:14), ravens (Leviticus, 11:15), owls
were permitted, bicycle manufacturers – mostly Meth-           (Leviticus, 11:16), cormorants (Leviticus, 11:17), swans,
odists – made unprecedented sales (Armstrong and               pelicans and eagles (Leviticus, 11:18) are specified as
Nelles, 1977). In this case, the observation of religion       not allowed. The same is true of the stork, the heron and
helped entrepreneurs in the bicycle sector.                    the bat (Leviticus, 11:19). Leviticus, 11:29 states, ‘These
   The production of religious products also provides          also shall be unclean unto you among the creeping
opportunities for entrepreneurship. Orthodox icons, for        things that creep upon the earth; the weasel, and the
instance, bring profits to dealers as well as to those who     mouse, and the tortoise after his kind’. Leviticus, 11:30
make the icons. Likewise, religious dietary requirements       adds, ‘And the ferret, and the chameleon, and the lizard,
can yield profits to entrepreneurs catering to specific        and the snail, and the mole’. Believers are not allowed to
needs. Buddhism, Hinduism, Islam, Jainism and                  eat scavengers and predators; for this reason, observers
Judaism are among religions that have dietary restric-         refrain from eating catfish, clams, lobsters, oysters and
tions, providing opportunities for entrepreneurs and           shrimp.
even for airlines catering to such religious needs of             The result of biblical commandments specifying food
observers; this is what Aldrich and Weidenmayer (1993)         laws is a lucrative niche market providing kosher
have referred to as ‘demand side’ entrepreneurship.            products. Rosen (2008) noted that in North America
   In Islam, some food is halal (meaning ‘permissible’ in      alone kosher products were a US$14 billion a year
Arabic), while some is prohibited. All fish with scales        business; she quoted Chaim Goldberg, saying, ‘There’s
(that the Bible approves of as kosher) are halal. The          no question that kosher is growing … As the world is
Qur’an specifically disallows the consumption of: all          getting more global, manufacturers … see kosher as a
blood; the carcass of an animal that died on its own or        very easy way to market their product’ (Rosen, 2008, p
that was killed by another animal; donkey meat; fanged         105). Based in Fair Haven, Newfoundland, Neptune Sea
predators; and pork. Furthermore, the Hanafi School of         Products is a kosher-sanctioned secondary fish-process-
Islam does not approve of the eating of shellfish,             ing plant; it produces 200 different products, including
including clams, crabs, lobster and shrimp; observers          Cajun cod and wasabi salmon. According to Rosen
also refrain from eating frogs. According to Minkus-           (2008), sales for the first year of this new venture were
McKenna (2007), 70% of Muslims worldwide follow                estimated to top $2 million. Rosen interviewed the
halal food standards, translating into an opportunity          entrepreneur behind Neptune Sea Products, who
worth US$580 billion annually. Many McDonald’s                 explained, ‘We only use fish that have fins and scales …
outlets are serving halal food in Australia, India,            The other main thing is, my employees can’t bring in
Indonesia, Malaysia, Pakistan, Singapore, South Africa         ham sandwiches for lunch’ (Rosen, 2008, p 106).
and the UK. Others who serve halal food at selected               Fifteen minutes down the road from Neptune Sea
locations include A&W, Burger King, Dunkin’ Donuts,            Products is the Rodrigues Winery, a family business in
KFC and Pizza Hut.                                             Markland. This is the first winery in Newfoundland and
   The Judaeo–Christian Bible has even more sophisti-          the first kosher and sulphite-free winery in Canada,
cated guidelines with regard to what may be eaten, and         producing wines from local blueberries, cloudberries,
these are outlined in Genesis, Leviticus and Deuter-           cranberries, raspberries and strawberries. Exports are
onomy. The King James Bible states, ‘Ye shall therefore        shipped as far away as Japan.
put difference between clean beasts and unclean, and
between unclean fowls and clean: and ye shall not make         Religious beliefs may hamper entrepreneurial spirit
your souls abominable by beast, or by fowl, or by any          Buddhism emphasizes the afterlife, and it has been
manner of living thing that creepeth on the ground,            suggested that Buddhists are not focused on entrepre-
which I have separated from you as unclean’ (Leviticus,        neurial activity (Cousins, 1996). This is especially so
20:25). Leviticus, 3:17 prohibits observers from eating        among Theravada Buddhists. ‘Where Theravada Bud-
blood or fat. Leviticus, 22:8 elaborates, ‘That which          dhism is the backbone of social and cultural values…,’
dieth of itself, or is torn with beasts, he shall not eat to   wrote Lewis (1955, p 105), ‘it may have a restraining
defile himself therewith: I am the LORD’ (King James           effect on the accumulation of wealth and the rise of an
Bible). This is understood to mean that it is not kosher to    entrepreneurial class’. Over half a century later,
eat food from animals that die themselves or that are          Theravada monks are still highly influential in Lao
killed by another animal. Leviticus also provides details      society.
as to what species the Bible allows observers to eat or           As discussed by Dana (1995b), Theravada monks
not. It is not permitted to eat camel: ‘he is unclean unto     have traditionally had a great impact on the educational
you’ (Leviticus, 11:4). Hares (Leviticus, 11:6), pork          system in Laos; in former times, the only schools were
(Leviticus, 11:7), eagles (Leviticus, 11:13), vultures         in wats, and they are still consulted on virtually all

94                                                             ENTREPRENEURSHIP AND INNOVATION Vol 10, No 2
Religion and entrepreneurship

matters, thereby playing an important role in a diversity      Religions have built-in mechanisms for the perpetuation
of spheres, ranging from private life to government            of values
policy. This is elaborated upon in detail in Dana              In Jain communities, where business and family overlap,
(2007a). Central to Theravada beliefs is the ultimate          a merchant’s family and community status is linked to
goal to extinguish unsatisfied desires. Its doctrine           optimal marriage (Bayly, 1983). Marriage takes place
focuses on aspects of existence, including dukkha              among co-religionists and within boundaries, and values
[suffering from unsatisfied desire] and anicca [imperma-       are propagated from one generation to the next. Dana
nence]. Assuming that unsatisfied desires cause                (2006, p 589) noted co-religionist matchmaking that
suffering, then suffering can be eliminated if its cause       allowed the perpetuation of religious values:
(desire) is eliminated. A respectable person, then,
according to this ideology, should not work towards the          ‘Travel was intrinsic to their livelihood and during
satisfaction of materialistic desires, but should rather         business trips these frequent travellers would pray,
strive to eliminate the desire itself. A monk, for instance,     and eat, with co-religionists, and sleep at their homes.
is specifically prohibited by the religion from tilling          The religious duty of allowing animals to rest on the
fields or raising animals.                                       Sabbath (from sunset on Friday until dusk on Satur-
   Lao folk tales reinforce the belief that a male monk          day) made it impossible to travel with livestock
should not labour for material wealth; yet the same              during this time of rest. Therefore, business trips
folklore conditions women to accept a heavy burden in            were often extended due to religious obligations, and
exchange for honour, protection and security. Even the           considerable time was spent with the families of
Lao currency portrays agricultural work being done by            other merchants. During this time, matchmaking was
women. Numerous Lao families who farm during the                 a common occurrence, as the son of a merchant
wet season become self-employed gold-diggers during              fancied the daughter of another. The co-religionists
the dry season. Prospectors camp along the Mekong                shared the same language, holidays, belief system
River, especially in the region of Luang Prabang. The            and dietary restrictions. All this, in turn, reinforced
women do the heaviest work, digging for dirt and                 social networking among this ethnic minority.’
panning it in wooden trays. The men weigh the gold, up           Likewise, in a study of Amish entrepreneurship, Dana
to one gram per day.                                           (2007b, pp 148–149) noted how values – as well as
   Writing about the former Kingdom of Moldavia,               skills – were passed on from one generation to the next:
Dana (2005) observed,
                                                                 ‘From a very young age, Amish children develop a
   ‘Orthodoxy in this kingdom emphasized the respect             close relationship with their parents. Parents spend
   of authority, along with the importance of guilt. A           almost all of their time with their children, teaching
   good Moldavian was expected to obey the religion              them Amish cultural values. It is not from formal
   and work the land. A non-mercantile culture did               education in school, but rather from their parents that
   nothing to encourage the development of entrepre-             children learn to become self-sufficient in life. Amish
   neurship. In 1812, when the kingdom lost Bessarabia           boys normally learn a variety of skills on their
   to Russia, the tsar’s feudal system continued to meet         father’s farm. This typically includes cabinetry,
   non-conformity with punishment.’                              carpentry, furniture-making and masonry … Most
                                                                 importantly for the Amish, each generation transmits
                                                                 cultural values to the next. This includes asceticism,
Rafiq (1992) suggested that Islam constituted a barrier
                                                                 frugality and thrift … Children thus become predis-
to capital access, due to the religious prohibition on
                                                                 posed towards self-employment, as parents guide
interest payments. Metcalf, Modood and Virdee
                                                                 them along an almost pre-determined road in life.
(1996) concluded that Pakistanis were less successful
                                                                 The young are not encouraged to explore such as to
than Indians in self-employment because they were
                                                                 discover themselves, but rather to fit into Amish
Muslim.
                                                                 society, and to feel needed within it. Often, a son
   Finally, a religion may encourage entrepreneurship in
                                                                 learns his trade from his father. Even when a son
the broad sense, but limit the sectors in which entrepre-
                                                                 does not adopt the same profession as his father, it is
neurship takes place. Jainism encourages
                                                                 practical to learn as many manual skills as possible.
entrepreneurship in trade, but does not allow self-
                                                                 A son becomes the apprentice of his father at a very
employment in agriculture (Iyer, 2004; Nevaskar, 1971).
                                                                 young age. Not only does a son learn how to work,
Adherence to this religion thus limits avenues for self-
                                                                 but also more importantly according to Amish
employment because of its strict pacifism (Iyer, 1999;
                                                                 tradition, he is conditioned into accepting the Amish
Nevaskar, 1971).
                                                                 belief that work is healthy and enjoyable.’

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Religion and entrepreneurship

For the Amish – as is the case among some other                Does entrepreneurship involve being broad-minded
religious groups – marrying outside the faith is shunned.      (open-minded); capable (competent, effective); or
‘If an Amish woman wants to marry an outsider, she             courageous? Examining Rokeach’s instrumental value
must leave the community, unless he joins Amish                of self-control, might this be linked to Weber’s (1930)
society. A deterrent to her leaving is that she is unpre-      values of asceticism, frugality and thrift?
pared for secular society, while a stumbling block in the
attempt to become Amish is the dialect’ (Dana, 2007b, p
149). Similarly, but to different degrees, intermarriage is
                                                               Final words
discouraged by other religions. In a study comparing           Sociologist Max Weber (1930) suggested that asceti-
Indian entrepreneurs in Singapore and their counterparts       cism, frugality and thrift were values that encouraged
in the UK, Hamilton, Dana and Benfell (2008) found             successful entrepreneurship; these are perhaps necessary
that in both countries, most respondents would not allow       but insufficient. I would add that context is important.
their children to marry outside the faith.                     Mennonites value asceticism, frugality and thrift, but
                                                               Old Colony Mennonites have traditionally been opposed
                                                               to the concept of private property. Hence, among
Towards the future                                             Mennonites, individual entrepreneurs are not flagships
In a study of mixed marriages and separation, Monahan          of entrepreneurship; instead, entrepreneurial activities
and Kephart (1954) showed that Jewish families broke           take a collective form, as described by Dana and Dana
up less often than non-Jewish ones. Presumably this            (2007). Indeed, different religions yield dissimilar
allowed values to be reinforced and to be passed on            patterns of entrepreneurship.
from one generation to the next. As society becomes               This paper discussed several observable patterns: (1)
increasingly tolerant of mixed marriages, what will            various religions value entrepreneurship to different
happen to values in the future?                                degrees; (2) different religions yield dissimilar patterns
   Glazer and Moynihan (1963, pp 298–299) found no             of entrepreneurship, possibly due to value differences
evidence of convergence among different religions:             (such as asceticism, frugality and thrift) but also due to
                                                               specialization (sometimes resulting in a monopoly) and
     ‘Thus, a Jewish ethos and a Catholic ethos emerge:        networks; (3) specialization along religious lines shapes
     they are more strongly affected by a specific religious   entrepreneurship; (4) credit networks, employment
     doctrine in the Catholic case than in the Jewish, but     networks, information networks and supply networks of
     neither is purely the expression of the spirit of a       co-religionists affect entrepreneurship; (5) religions
     religion … The important fact is that the differences     provide opportunities for entrepreneurship; (6) religious
     in values and attitudes between the two groups do         beliefs may hamper entrepreneurial spirit; and (7)
     not, in general, become smaller with time. On the         religions have built-in mechanisms for the perpetuation
     contrary: there is probably a wider gap between Jews      of values.
     and Catholics in New York today than in the days of          When learning about religions, it is evident that each
     Al Smith.’                                                has a set of values. Respect must be paid to the distinc-
                                                               tiveness and differences of all.
Is this still true almost five decades later?
   Linking entrepreneurship to values offers endless
possibilities for future research, whether or not these
                                                               Acknowledgments
values are promoted by a religion. Some of Rokeach’s           The author thanks Professor Ivan Light (UCLA) for
(1973) values may impact on entrepreneurship, and              interesting discussions leading to this article. He also
empirical investigation of this could present interesting      thanks the following for comments on preliminary
research opportunities. Amish entrepreneurs value              drafts: Dr Garth Cant (University of Canterbury); Dr
religion over prosperity, but might Rokeach’s terminal         Sarah Drakopoulou Dodd (ALBA Graduate School of
value of a prosperous life lead to an entrepreneurial          Business and the Robert Gordon University); Professor
start-up? Could it be hypothesized that one who values         Gopalkrishnan R. Iyer (Florida Atlantic University); and
freedom (independence, free choice) as per Rokeach             Professor Richard W. Wright (UCLA).
(1973) might choose to become an entrepreneur?
   Likewise, it could be empirically tested whether
entrepreneurs exhibit some of Rokeach’s (1973) instru-
                                                               Notes
                                                               1
mental values. Might there be a relationship between              See Young (1991) and Young and Sloman (1986).
                                                               2
                                                                  This is based on Matthew, 19:23–24.
Rokeach’s instrumental value of ambition (hard-                 3
                                                                  Rath and Kloosterman (2003, pp 123–124) revisited this
working, aspirational) and successful entrepreneurship?        theme. They noted that ‘The arrival of Jews from the Iberian

96                                                             ENTREPRENEURSHIP AND INNOVATION Vol 10, No 2
Religion and entrepreneurship
Peninsula in the sixteenth century and later from Eastern               attitudes to corporate social responsibility in a large cross-
Europe, and of Roman Catholics from Westphalia throughout               country sample’, Journal of Business Ethics, Vol 71, No 3, pp
the nineteenth century, greatly influenced the Dutch economic           229–243.
landscape as their business acumen enhanced the nation’s             Candland, C. (2000), ‘Faith as social capital: religion and
economic and cultural wealth’.                                          community development in southern Asia’, Policy Sciences,
 4
   Today, Grahams are manufactured by Nabisco and certified as          Vol 33, No 3–4, December, pp 355–374.
kosher by the Union of Orthodox Rabbis.                              Corley, T. A. B. (1998), ‘Changing Quakers attitudes to wealth,
 5
   Altinay (2008) distinguished among religious Muslims and             1690–1950’, in David, J. J., ed, Religion, Business and Wealth
secular Muslims. Other studies have treated Muslims as a                in Modern Britain, Routledge, London, pp 137–150.
homogeneous group, and did not distinguish between religious         Cousins, L. S. (1996), ‘The dating of the historical Buddha: a
and non-practising individuals (see Basu and Altinay, 2002;             review article’, Journal of the Royal Asiatic Society, Vol 6, No
Dana and Dana, 2008; Metcalf, Modood and Virdee, 1996; and              1, pp 57–63.
Rafiq, 1992).                                                        Dana, L. P. (1991), ‘Bring in more entrepreneurs’, Policy Options,
                                                                        Vol 12, No 9, pp 18–19.
                                                                     Dana, L. P. (1995a), ‘Entrepreneurship in a remote sub-Arctic
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ENTREPRENEURSHIP AND INNOVATION Vol 10, No 2                                                                                          97
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