Analysis of the Success and Challenges of Chinese Entrepreneurs in Semporna, Malaysia

Main Article Content

Shuyang Fan
Asia Europe Institute, University of Malaya, Kuala Lumpur, Malaysia

Fumitaka Furuoka
Asia-Europe Institute, University of Malaya, Malaysia

Suteng Lee
Faculty of Business and Economics, University of Malaya, Malaysia

DOI: https://doi.org/10.70267/fer.250303.117128

Keywords

Chinese small and medium-sized enterprises, Chinese entrepreneurs, expatriate performance, Semporna, Malaysia, entrepreneurial success and failure

Abstract

This qualitative study explores the practical entrepreneurial experiences, operational issues, and adaptive behaviors of Chinese small and medium enterprises (SMEs) in Semporna, Malaysia. Drawing from field investigations and one-to-one interviews of local Chinese tourism practitioners, this paper examines the development of cross-border tourism ventures in terms of the influences of institutional regulations, market fluctuations and cross-cultural disparities. The empirical findings point to three main constraints faced by immigrant entrepreneurs: restrictive financial entry policies and continuous cash flow pressure, intensive market competition and seasonal tourism volatility, and cultural integration barriers due to language barriers and different religious and social practices. In response to these multidimensional challenges, Chinese entrepreneurs have adopted context-specific adaptive strategies, including value chain-oriented portfolio investment, reliance on ethnic business associations and transnational social ties, local talent recruitment, digital tourism promotion, and proactive community engagement. This study extends the literature by comparing entrepreneurial ecosystems in China and Malaysia, and clarifies how institutional and contextual differences shape firms’ strategic judgments and operational outcomes. It contributes to the mixed embeddedness framework by further detailing the role of digital-based transnational social resources in supporting migrant business development in peripheral tourism destinations. In practice, this study offers targeted operational guidance for Chinese SMEs to expand into Southeast Asia and provides practical references for local tourism governance and cross-border economic cooperation.

Abstract 40 | PDF Downloads 22

References

  • [1] Light, I. H., & Bonacich, E. (1988). Immigrant entrepreneurs: Koreans in Los Angeles, 1965–1982. University of California Press.
  • [2] Aldrich, H. E., & Waldinger, R. (1990). Ethnicity and entrepreneurship. Annual Review of Sociology, 16, 111–135. https://doi.org/10.1146/annurev.so.16.080190.000551
  • [3] Portes, A., & Zhou, M. (1992). Gaining the upper hand: Economic mobility among immigrant and domestic minorities. Ethnic and Racial Studies, 15(4), 491–522. https://doi.org/10.1080/01419870.1992.9993761
  • [4] Waldinger, R., Aldrich, H., & Ward, R. (1990). Ethnic entrepreneurs: Immigrant business in industrial societies. Sage.
  • [5] Rath, J. (Ed.). (2000). Immigrant businesses: The economic, political and social environment. Macmillan.
  • [6] Ram, M., & Jones, T. (2008). Ethnic-minority businesses in the UK: A review of research and policy developments. Environment and Planning C: Government and Policy, 26(2), 352–374. https://doi.org/10.1068/c0722
  • [7] Zhou, M. (2004). Revisiting ethnic entrepreneurship: Convergencies, controversies, and conceptual advancements. International Migration Review, 38(3), 1040–1074. https://doi.org/10.1111/j.1747-7379.2004.tb00228.x
  • [8] Aldrich, H., & Zimmer, C. (1986). Entrepreneurship through social networks. In D. L. Sexton & R. W. Smilor (Eds.), The art and science of entrepreneurship (pp. 3–23). Ballinger.
  • [9] Light, I. H., & Gold, S. J. (2000). Ethnic economies. Academic Press.
  • [10] Volery, T. (2007). Ethnic entrepreneurship: A theoretical framework. In L.-P. Dana (Ed.), Handbook of research on ethnic minority entrepreneurship (pp. 30–41). Edward Elgar.
  • [11] Dana, L.-P. (Ed.). (2007). Handbook of research on ethnic minority entrepreneurship: A co-evolutionary view on resource management. Edward Elgar.
  • [12] Kloosterman, R., Van der Leun, J., & Rath, J. (1999). Mixed embeddedness: (In)formal economic activities and immigrant businesses in the Netherlands. International Journal of Urban and Regional Research, 23(2), 252–266. https://doi.org/10.1111/1468-2427.00194
  • [13] Kloosterman, R., & Rath, J. (2001). Immigrant entrepreneurs in advanced economies: Mixed embeddedness further explored. Journal of Ethnic and Migration Studies, 27(2), 189–201. https://doi.org/10.1080/13691830020041561
  • [14] Coleman, J. S. (1988). Social capital in the creation of human capital. American Journal of Sociology, 94(Supplement), S95–S120.
  • [15] Burt, R. S. (1992). Structural holes: The social structure of competition. Harvard University Press.
  • [16] Adler, P. S., & Kwon, S.-W. (2002). Social capital: Prospects for a new concept. Academy of Management Review, 27(1), 17–40. 10.5465/amr.2002.5922314
  • [17] Davidsson, P., & Honig, B. (2003). The role of social and human capital among nascent entrepreneurs. Journal of Business Venturing, 18(3), 301–331. https://doi.org/10.1016/S0883-9026(02)00097-6
  • [18] Nahapiet, J., & Ghoshal, S. (1998). Social capital, intellectual capital, and the organizational advantage. Academy of Management Review, 23(2), 242–266. https://doi.org/10.2307/259373
  • [19] Redding, S. G. (1990). The spirit of Chinese capitalism. Walter de Gruyter.
  • [20] Tong, C. K., & Yong, P. K. (1998). Guanxi bases, xinyong and Chinese business networks. The British Journal of Sociology, 49(1), 75–96. https://doi.org/10.2307/591262
  • [21] Hamilton, G. G. (2006). Commerce and capitalism in Chinese societies. Routledge.
  • [22] Lever-Tracy, C., Ip, D., & Tracy, N. (1996). The Chinese diaspora and mainland China: An emerging economic synergy. Macmillan.
  • [23] Yeung, H. W.-c., & Olds, K. (Eds.). (2000). Globalization of Chinese business firms. Macmillan.
  • [24] Ma, L. J. C., & Cartier, C. (Eds.). (2003). The Chinese diaspora: Space, place, mobility, and identity. Rowman & Littlefield.
  • [25] Menkhoff, T., & Gerke, S. (Eds.). (2002). Chinese entrepreneurship and Asian business networks. RoutledgeCurzon.
  • [26] Drori, I., Honig, B., & Wright, M. (2009). Transnational entrepreneurship: An emergent field of study. Entrepreneurship Theory and Practice, 33(5), 1001–1022. https://doi.org/10.1111/j.1540-6520.2009.00332.x
  • [27] Patel, P. C., & Conklin, B. (2009). The balancing act: The role of transnational habitus and social networks in balancing transnational entrepreneurial activities. Entrepreneurship Theory and Practice, 33(5), 1045–1078. https://doi.org/10.1111/j.1540-6520.2009.00334.x
  • [28] Sequeira, J. M., Carr, J. C., & Rasheed, A. A. (2009). Transnational entrepreneurship: Determinants of firm type and owner attributions of success. Entrepreneurship Theory and Practice, 33(5), 1023–1044. https://doi.org/10.1111/j.1540-6520.2009.00333.x
  • [29] Chen, W., & Tan, J. (2009). Understanding transnational entrepreneurship through a network lens: Theoretical and methodological considerations. Entrepreneurship Theory and Practice, 33(5), 1079–1091. https://doi.org/10.1111/j.1540-6520.2009.00335.x
  • [30] Terjesen, S., & Elam, A. (2009). Transnational entrepreneurs’ venture internationalization strategies: A practice theory approach. Entrepreneurship Theory and Practice, 33(5), 1093–1120. https://doi.org/10.1111/j.1540-6520.2009.00336.x
  • [31] Liu, H. (2005). New migrants and the revival of overseas Chinese nationalism. Journal of Contemporary China, 14(43), 291–316. https://doi.org/10.1080/10670560500065611
  • [32] Wang, G. (1991). China and the Chinese overseas. Times Academic Press.
  • [33] Yeung, H. W.-c. (2002). Entrepreneurship in international business: An institutional perspective. Asia Pacific Journal of Management, 19(1), 29–61. https://doi.org/10.1023/A:1014897920821
  • [34] Jesudason, J. V. (1989). Ethnicity and the economy: The state, Chinese business, and multinationals in Malaysia. Oxford University Press.
  • [35] Gomez, E. T., & Hsiao, H.-H. M. (Eds.). (2001). Chinese business in South-East Asia: Contesting cultural explanations, researching entrepreneurship. Curzon.
  • [36] Gomez, E. T. (1999). Chinese business in Malaysia: Accumulation, ascendance, accommodation. Curzon.
  • [37] Pan, L. (Ed.). (1999). The encyclopedia of the Chinese overseas. Harvard University Press.
  • [38] Suryadinata, L. (Ed.). (1997). Ethnic Chinese as Southeast Asians. Institute of Southeast Asian Studies.
  • [39] Liu, W., & Dunford, M. (2016). Inclusive globalization: Unpacking China’s Belt and Road Initiative. Area Development and Policy, 1(3), 323–340. https://doi.org/10.1080/23792949.2016.1232598
  • [40] Liu, H., & Lim, G. (2019). The political economy of a rising China in Southeast Asia: Malaysia’s response to the Belt and Road Initiative. Journal of Contemporary China, 28(116), 216–231. https://doi.org/10.1080/10670564.2018.1511393
  • [41] Gössling, S., Scott, D., & Hall, C. M. (2021). Pandemics, tourism and global change: A rapid assessment of COVID-19. Journal of Sustainable Tourism, 29(1), 1–20. https://doi.org/10.1080/09669582.2020.1758708
  • [42] Foo, L.-P., Chin, M.-Y., Tan, K.-L., & Phuah, K.-T. (2021). The impact of COVID-19 on tourism industry in Malaysia. Current Issues in Tourism, 24(19), 2735–2739. https://doi.org/10.1080/13683500.2020.1777951
  • [43] Kuckertz, A., Brändle, L., Gaudig, A., Hinderer, S., Reyes, C. A. M., Prochotta, A., Steinbrink, K. M., & Berger, E. S. C. (2020). Startups in times of crisis: A rapid response to the COVID-19 pandemic. Journal of Business Venturing Insights, 13, e00169. https://doi.org/10.1016/j.jbvi.2020.e00169
  • [44] Ratten, V. (2020). Coronavirus (COVID-19) and entrepreneurship: Changing life and work landscape. Journal of Small Business & Entrepreneurship, 32(5), 503–516. https://doi.org/10.1080/08276331.2020.1790167
  • [45] Yin, R. K. (2018). Case study research and applications: Design and methods (6th ed.). Sage.
  • [46] Stake, R. E. (1995). The art of case study research. Sage.
  • [47] Creswell, J. W., & Poth, C. N. (2018). Qualitative inquiry and research design: Choosing among five approaches (4th ed.). Sage.
  • [48] Merriam, S. B., & Tisdell, E. J. (2016). Qualitative research: A guide to design and implementation (4th ed.). Jossey-Bass.
  • [49] Eisenhardt, K. M. (1989). Building theories from case study research. Academy of Management Review, 14(4), 532–550. 10.5465/amr.1989.4308385
  • [50] Patton, M. Q. (2015). Qualitative research and evaluation methods: Integrating theory and practice (4th ed.). Sage.
  • [51] Guest, G., Bunce, A., & Johnson, L. (2006). How many interviews are enough? An experiment with data saturation and variability. Field Methods, 18(1), 59–82. https://doi.org/10.1177/1525822X05279903
  • [52] Braun, V., & Clarke, V. (2006). Using thematic analysis in psychology. Qualitative Research in Psychology, 3(2), 77–101. https://doi.org/10.1191/1478088706qp063oa
  • [53] Miles, M. B., Huberman, A. M., & Saldaña, J. (2020). Qualitative data analysis: A methods sourcebook (4th ed.). Sage.
  • [54] Gioia, D. A., Corley, K. G., & Hamilton, A. L. (2013). Seeking qualitative rigor in inductive research: Notes on the Gioia methodology. Organizational Research Methods, 16(1), 15–31. https://doi.org/10.1177/1094428112452151
  • [55] Lincoln, Y. S., & Guba, E. G. (1985). Naturalistic inquiry. Sage.
  • [56] Granovetter, M. (1985). Economic action and social structure: The problem of embeddedness. American Journal of Sociology, 91(3), 481–510. https://doi.org/10.1086/228311
  • [57] Portes, A., & Sensenbrenner, J. (1993). Embeddedness and immigration: Notes on the social determinants of economic action. American Journal of Sociology, 98(6), 1320–1350. https://doi.org/10.1086/230191
  • [58] Shane, S., & Venkataraman, S. (2000). The promise of entrepreneurship as a field of research. Academy of Management Review, 25(1), 217–226. 10.5465/amr.2000.2791611
  • [59] Bruton, G. D., Ahlstrom, D., & Li, H.-L. (2010). Institutional theory and entrepreneurship: Where are we now and where do we need to move in the future? Entrepreneurship Theory and Practice, 34(3), 421–440. https://doi.org/10.1111/j.1540-6520.2010.00390.x
  • [60] Hofstede, G. (2001). Culture’s consequences: Comparing values, behaviors, institutions and organizations across nations (2nd ed.). Sage.
  • [61] Ward, C., Bochner, S., & Furnham, A. (2001). The psychology of culture shock (2nd ed.). Routledge.
  • [62] Johanson, J., & Vahlne, J.-E. (1977). The internationalization process of the firm: A model of knowledge development and increasing foreign market commitments. Journal of International Business Studies, 8(1), 23–32. https://doi.org/10.1057/palgrave.jibs.8490676
  • [63] Johanson, J., & Vahlne, J.-E. (2009). The Uppsala internationalization process model revisited: From liability of foreignness to liability of outsidership. Journal of International Business Studies, 40(9), 1411–1431. https://doi.org/10.1057/jibs.2009.24
  • [64] Oviatt, B. M., & McDougall, P. P. (1994). Toward a theory of international new ventures. Journal of International Business Studies, 25(1), 45–64. https://doi.org/10.1057/palgrave.jibs.8490193
  • [65] McDougall, P. P., Shane, S., & Oviatt, B. M. (1994). Explaining the formation of international new ventures: The limits of theories from international business research. Journal of Business Venturing, 9(6), 469–487. https://doi.org/10.1016/0883-9026(94)90017-5
  • [66] Welter, F. (2011). Contextualizing entrepreneurship: Conceptual challenges and ways forward. Entrepreneurship Theory and Practice, 35(1), 165–184. https://doi.org/10.1111/j.1540-6520.2010.00427.x
  • [67] Buckley, P. J., Clegg, L. J., Cross, A. R., Liu, X., Voss, H., & Zheng, P. (2007). The determinants of Chinese outward foreign direct investment. Journal of International Business Studies, 38(4), 499–518. https://doi.org/10.1057/palgrave.jibs.8400277
  • [68] Chen Kai Hui. Sarawak Chinese family business inheritance [D]. Huaqiao University, 2022.
  • [69] Child, J., & Rodrigues, S. B. (2005). The internationalization of Chinese firms: A case for theoretical extension? Management and Organization Review, 1(3), 381–410. https://doi.org/10.1111/j.1740-8784.2005.0020a.x
  • [70] Deng, P. (2012). The internationalization of Chinese firms: A critical review and future research. International Journal of Management Reviews, 14(4), 408–427. https://doi.org/10.1111/j.1468-2370.2011.00323.x
  • [71] He, Y. J. (2018). The enlightenment of college entrepreneurship education in ASEAN countries to China [Master’s thesis]. Southeast University.
  • [72] Luo, Y., & Tung, R. L. (2007). International expansion of emerging market enterprises: A springboard perspective. Journal of International Business Studies, 38(4), 481–498. https://doi.org/10.1057/palgrave .jibs.8400275
  • [73] Mathews, J. A. (2006). Dragon multinationals: New players in 21st century globalization. Asia Pacific Journal of Management, 23(1), 5–27. https://doi.org/10.1007/s10490-006-6113-0

Article Sidebar

PDF
Published
Aug 24, 2026
Issue
Vol. 3 No. 3 (2026)
Section
Research Articles
Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

How to Cite

Fan, S., Furuoka, F., & Lee, S. (2026). Analysis of the Success and Challenges of Chinese Entrepreneurs in Semporna, Malaysia. Financial Economics Research, 3(3), 117-128. https://doi.org/10.70267/fer.250303.117128