Immigration and rates of entrepreneurship in large US communities

Abstract

ABSTRACT Using US county-level data from the Business Information Tracking System, we revisit the influence of immigrants on business start-ups. We find that a higher density of foreign-born immigrants has a positive impact on new business formation, but the relationship varies by the ethnic background of the immigrants and by industry type. Specifically, Caucasian immigrants, and to a lesser extent Asians, drive the positive relationship. Higher concentrations of Latinx immigrants, however, have either no or a predominantly negative influence on business start-up rates. The largely positive relationship between foreign-born and entrepreneurship varies significantly across different industries, particularly for Asians and Latinx. Care must be taken when making broad generalizations about the immigrant and entrepreneurship relationship. Specifically, there are significant variations across ethnic backgrounds and types of industries.