Revisiting native and immigrant entrepreneurial activity

Entrepreneurial activity differs substantially across immigrant groups in the USA, but relating self-employment rates in the US to home-country self-employment shares has provided inconclusive results in previous studies. This paper offers new evidence on the relationship between native self-employment and the self-employment decision of immigrants and their descendants. We argue that the previous literature has neglected to account for different proxies of entrepreneurial behavior and for determinants of self-employment in the country of origin. We find mixed evidence of a significant relationship between entrepreneurial activity of US immigrants and two different measures of entrepreneurial activity in their respective countries of origin. Our findings suggest that differences in self-employment across immigrants of different origin are to some degree an expression of the behavior acquired under varying economic and institutional environments.

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