Immigration and entrepreneurship in Europe: cross-country evidence

Riillo, Cesare Fabio Antonio and Peroni, Chiara (2022): Immigration and entrepreneurship in Europe: cross-country evidence.

Abstract

This paper investigates the empirical link between migrations and entrepreneurship in European countries, for the first time drawing from a large sample of individuals sourced from the cross-country GEM survey. Specifically, the paper studies the impact of individuals' immigration status on entrepreneurial outcomes at all stages of the entrepreneurial process: interest in starting a new business, effectively starting, running a new business and managing an established company. The analysis uses a sequential probit model with sample selection to capture the dependence between entrepreneurial stages. It also distinguishes between different typologies of entrepreneurs (necessity and opportunity-driven, European and non-European; recent and long-standing immigrants). Additionally, it implements heteroscedasticity based instruments to address potential endogeneity issues. The study finds evidence that immigration has a positive effect on entrepreneurship. Immigrants are more willing to engage in entrepreneurship. Among those who started a new business, however, immigrants have lower chances than natives to succeed in the following stages of entrepreneurship.

• Item Type: MPRA Paper
• Language: English
• Keywords: entrepreneurship; immigration; sequential logit; probit; sample selection; GEM
• Subjects: C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C25 - Discrete Regression and Qualitative Choice Models ; Discrete Regressors ; Proportions ; Probabilities; D - Microeconomics > D0 - General; F - International Economics > F2 - International Factor Movements and International Business > F22 - International Migration; J - Labor and Demographic Economics > J1 - Demographic Economics > J15 - Economics of Minorities, Races, Indigenous Peoples, and Immigrants ; Non-labor Discrimination; J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers; J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers > J61 - Geographic Labor Mobility ; Immigrant Workers; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O15 - Human Resources ; Human Development ; Income Distribution ; Migration

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