The Role of Ethnic Social Capital in the Operation of Entrepreneurs in Transcarpathia, Ukraine

Abstract

Owing to its geopolitical position, history of shifting borders, and multiethnic-multilingual population, Transcarpathia provides a convenient environment to study how ethnicity interplays with the economy. The present research aims to examine the role of formal and informal ethnic social capital in the life of Transcarpathian enterprises. The research is based on mainly semi-structured interviews conducted with foreign investors in Transcarpathia and with local Transcarpathian Hungarian entrepreneurs as well as with representatives of business organizations related to the given community. I also analyzed economic databases and statistical data. The results of the research imply that informal relationships are essential in the operation of enterprises, however, these relationships are not always organized on an ethnic basis. I argue that institutionalized relations have not played an important role in the case of foreign enterprises. However, among Transcarpathian Hungarian entrepreneurs, the role of formal ethnic relations has increased due to the financial support provided by Hungary.