Immigration and entrepreneurship: Is there a uniform relationship across countries?

Abstract

This article has two objectives. Firstly, it examines the heterogeneous effects of the immigrant share on entrepreneurial activities. Secondly, it analyzes how national culture moderates the relationship between immigration and entrepreneurship activities. Using data from the Global Entrepreneurship Monitor (GEM), we form a cross-sectional data set of 630,139 observations from 69 nations covering the period of 2012–2015, and use a grouped logit modeling approach. Building on the knowledge spillover and mixed embeddedness theories, our results reveal that the immigrant share is strongly associated with the likelihood for individuals to engage in entrepreneurship of different types—opportunity-driven, necessity-driven, export-oriented, and growth-oriented. Further analysis indicates that, although the immigrant share has a significant association with total entrepreneurial activities; there is no consistency across countries. Specifically, a one-standard deviation increment in the migrant share decreases the likelihood of total entrepreneurial activities (TEA) by 0.7 and 7.3 percentage points in the full sample and in middle-income countries, respectively. However, TEA benefits from immigration in high-income countries. Although national culture moderates the nexus between immigration and entrepreneurship, we find that cultural dimensions have a greater impact on middle-income countries entrepreneurial activities than on those of high-income countries.