Immigrant Entrepreneurship and Business Survival during Recession: Evidence from a Local Economy

Abstract

Empirical evidence suggests that immigrants appear to be more entrepreneurially active than native people. While the formation of new firms by immigrants has been widely studied, the literature about the performance of these new ventures created by immigrants after their inception remains scarce and anecdotal. This study sheds light on firm-internal and firm-external factors that affect the life expectancy of new firms created by immigrants within a local economy during a period of recession, when the creation of firms is particularly important. The results show that immigrant entrepreneurs are more likely to quit their businesses earlier than their native counterparts. We argue that this may be partially explained by the liability of foreignness faced by immigrants.