In this article the connection between entrepreneurship and ethnic identity is examined. Two central arguments are put forward. First, market forces and private sector development are diminishing the influence of the clan on Nuosu-Yi entrepreneurs. Although the clan can fulfil important functions in the start-up of new ventures, it also tends to become a burden on successful enterprises. Concurrently, clan-transcending institutions are emerging. Secondly, entrepreneurs oscillate between their roles as bearers of tradition on the one hand and harbingers of modernity on the other. Furthermore I argue that the drawing of borders between Nuosu-Yi and Han entrepreneurs is a significant expression of ethnic identity. Identity is not just an individual process but also a collective one. Consequently the identity-giving impact of entrepreneurship can take place only in interaction with other groups (Han). Nuosu-Yi entrepreneurs develop ethnic consciousness as there exists a strong cultural nationalism among entrepreneurs as well as among other Yi. Their goal is a desire for respect within the Chinese nation state that could be obtained by means of entrepreneurship and economic development.
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