Immigrant entrepreneurship plays an important role in the American economy. Immigrant- founded firms provide jobs and innovation, and immigrant entrepreneurs frequently show up in popular press business narratives, legislation and lobbying discussions, and the founding histories of many prominent firms. About 40 percent of Fortune 500 companies were founded by first- or second-generation immigrants. Yet relatively little is known about the broader impacts of immigrant entrepreneurs in terms of job creation and economic growth.
In this study, Sari Pekkala Kerr and William Kerr looked at immigrant entrepreneurship in 2007 and 2012 using the Survey of Business Owners. They found that first-generation immigrants create about 25 percent of new firms in America, and more than 40 percent in some states. They also found that immigrant-owned firms tend to create fewer jobs than native-owned firms and offer fewer benefits, but have comparable pay levels and engage more in international activities. Tech clusters like Silicon Valley demonstrate a particular strength for immigrant high-tech entrepreneurship.
These results confirm that immigrants enter entrepreneurship at a higher rate than non-immigrants, and begin to describe the distinctive features of immigrant-founded firms. This is important given the role of new businesses in generating jobs, and the significant impact of job creation on the U.S. economy.
