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The Marginalization of Globally-Born Businesses: Ethnically Divided Trade in Hamburg and the World Economy-The Case of Global Persian Carpet Trade through Ethnic Networks

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Author(s): Shahamak Rezaei

Journal: American Journal of Economics and Business Administration
ISSN 1945-5488

Volume: 1;
Issue: 2;
Start page: 79;
Date: 2009;
Original page

Keywords: Globalization | global trade | world economy | ethnic entrepreneurship | business network | ethnic network | business clusters | ethnic enclave economy | ethnicity and “sub-ethnicity” | business break-out | weak ties and strong ties | SME’s and growth | socio-economic mobility

ABSTRACT
Problem statement: Persian carpets have long been a major commodity in the world market, controlled by the Tehran Carpet Bazaar and the Hamburg Free Harbor. Today about 200 private traders in the Hamburg Free Harbor area export their carpets to about 10,000 private carpet traders throughout the world, these being mainly of Iranian origin. The case of Persian Carpet represents one of the most magnificent and powerful examples of ethnic enclave economy in contemporary world. Approach: This study brought about some in depth knowledge, qualitative as well as quantitative, of how such an ethnic enclave economy of scale operates, how it reproduced itself and how it met the challenges, be it political, demographical or others. Results: The study showed, that in spite of major political turbulence in Iran since 1979, the spreading of state controlled trading companies inside and outside of Iran and increasing international market pressure due to the growth of copying production of Persian carpets in other countries, the Tehran-Hamburg axis remains the core of this trade-with private Iranian traders occupying the dominant position on both sides of the transaction line. Taking a closer look it became obvious that in particular, it is Iranian traders of Azarbaidjan descent who speak “Azari”, a language similar to Turkish, who control the trade in both cities. Understanding the character and strategies of ethnic economy and ethnic enclave economy this study concludes, that it was necessary to look beyond and within the demarcation of national background and even ethnic boundaries in a broader sense according to which these phenomena mistakenly had been attempted to be explained. Conclusion: The engine of ethnic enclave economy cannot be upheld without a core, entrance into mainstream economy which required both more than common national and ethnic background. The challenge for this economy is how to dissolve from strong ties to more loose organization based on rationally structured mode of organization. So far, however, the limited group of traders stick together in order to remain in control of this world-wide billion dollars trade.
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