Papers Containing Keywords(s): 'immigrant entrepreneurs'
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Timothy Bates - 3
Viewing papers 1 through 10 of 12
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Working PaperAre Immigrants More Innovative? Evidence from Entrepreneurs
November 2023
Working Paper Number:
CES-23-56
We evaluate the contributions of immigrant entrepreneurs to innovation in the U.S. using linked survey-administrative data on 199,000 firms with a rich set of innovation measures and other firm and owner characteristics. We find that not only are immigrants more likely than natives to own businesses, but on average their firms display more innovation activities and outcomes. Immigrant owned firms are particularly more likely to create completely new products, improve previous products, use new processes, and engage in both basic and applied R&D, and their efforts are reflected in substantially higher levels of patents and productivity. Immigrant owners are slightly less likely than natives to imitate products of others and to hire more employees. Delving into potential explanations of the immigrant-native differences, we study other characteristics of entrepreneurs, access to finance, choice of industry, immigrant self-selection, and effects of diversity. We find that the immigrant innovation advantage is robust to controlling for detailed characteristics of firms and owners, it holds in both high-tech and non-high-tech industries and, with the exception of productivity, it tends to be even stronger in firms owned by diverse immigrant-native teams and by diverse immigrants from different countries. The evidence from nearly all measures that immigrants tend to operate more innovative and productive firms, together with the higher share of business ownership by immigrants, implies large contributions to U.S. innovation and growth.View Full Paper PDF
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Working PaperThe Local Origins of Business Formation
July 2023
Working Paper Number:
CES-23-34
What locations generate more business ideas, and where are ideas more likely to turn into businesses? Using comprehensive administrative data on business applications, we analyze the spatial disparity in the creation of business ideas and the formation of new employer startups from these ideas. Startups per capita exhibit enormous variation across granular units of geography. We decompose this variation into variation in ideas per capita and in their rate of transition to startups, and find that both components matter. Observable local demographic, economic, financial, and business conditions accounts for a significant fraction of the variation in startups per capita, and more so for the variation in ideas per capita than in transition rate. Income, education, age, and foreign-born share are generally strong positive correlates of both idea generation and transition. Overall, the relationship of local conditions with ideas differs from that with transition rate in magnitude, and sometimes, in sign: certain conditions (notably, the African-American share of the population) are positively associated with ideas, but negatively with transition rates. We also find a close correspondence between the actual rank of locations in terms of startups per capita and the predicted rank based only on observable local conditions ' a result useful for characterizing locations with high startup activity.View Full Paper PDF
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Working PaperImmigration and Local Business Dynamics: Evidence from U.S. Firms
August 2021
Working Paper Number:
CES-21-18
This paper finds that establishment entry and exit'particularly the prevention of establishment exit'drive immigrant absorption and immigrant-induced productivity increases in U.S. local industries. Using a comprehensive collection of confidential survey and administrative data from the Census Bureau, it shows that inflows of immigrantworkers lead to more establishment entry and less establishment exit in local industries. These relationships are responsible for nearly all of long-run immigrant-induced job creation, with 78 percent accounted for by exit prevention alone, leaving a minimal role for continuing establishment expansion. Furthermore, exit prevention is not uniform: immigrant inflows increase the probability of exit by establishments from low productivity firms and decrease the probability of exit by establishments from high productivity firms. As a result, the increase in establishment count is concentrated at the top of the productivity distribution. A general equilibrium model proposes a mechanism that ties immigrantworkers to high productivity firms and shows how accounting for changes to the firm productivity distribution can yield substantially larger estimates of immigrant-generated economic surplus than canonical models of labor demand.View Full Paper PDF
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Working PaperWhose Job Is It Anyway? Co-Ethnic Hiring in New U.S. Ventures
March 2021
Working Paper Number:
CES-21-05
We explore co-ethnic hiring among new ventures using U.S. administrative data. Co-ethnic hiring is ubiquitous among immigrant groups, averaging about 22.5% and ranging from 2% to 40%. Co-ethnic hiring grows with the size of the local ethnic workforce, greater linguistic distance to English, lower cultural/genetic similarity to U.S. natives, and in harsher policy environments for immigrants. Co ethnic hiring is remarkably persistent for ventures and for individuals. Co-ethnic hiring is associated with greater venture survival and growth when thick local ethnic employment surrounds the business. Our results are consistent with a blend of hiring due to information advantages within ethnic groups with some taste-based hiring.View Full Paper PDF
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Working PaperImmigration and Entrepreneurship in the United States
December 2020
Working Paper Number:
CES-20-44
Immigrants can expand labor supply and compete for jobs with native-born workers. But immigrants may also start new firms, expanding labor demand. This paper uses U.S. administrative data and other data sources to study the role of immigrants in entrepreneurship. We ask how often immigrants start companies, how many jobs these firms create, and how firms founded by native-born individuals compare. A simple model provides a measurement framework for addressing the dual roles of immigrants as founders and workers. The findings suggest that immigrants act more as 'job creators' than 'job takers' and play outsized roles in U.S. high-growth entrepreneurship.View Full Paper PDF
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Working PaperIMMIGRANT ENTREPRENEURS AND INNOVATION IN THE U.S. HIGH-TECH SECTOR
February 2019
Working Paper Number:
CES-19-06
We estimate differences in innovation behavior between foreign versus U.S.-born entrepreneurs in high-tech industries. Our data come from the Annual Survey of Entrepreneurs, a random sample of firms with detailed information on owner characteristics and innovation activities. We find uniformly higher rates of innovation in immigrant-owned firms for 15 of 16 different innovation measures; the only exception is for copyright/trademark. The immigrant advantage holds for older firms as well as for recent start-ups and for every level of the entrepreneur's education. The size of the estimated immigrant-native differences in product and process innovation activities rises with detailed controls for demographic and human capital characteristics but falls for R&D and patenting. Controlling for finance, motivations, and industry reduces all coefficients, but for most measures and specifications immigrants are estimated to have a sizable advantage in innovation.View Full Paper PDF
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Working PaperTHE DYNAMICS OF LATINO-OWNED BUSINESS WITH COMPARISIONS TO OTHER ETHNICITIES
January 2016
Working Paper Number:
CES-16-33
This paper employs the Michigan Census Research Data Center to merge three limited-access Census Bureau data sets by individual firm and establishment level to investigate the factors associated with the Latino-owned Business (LOB) location and dynamics over time. The three main LOB outcomes under analysis are as follows: (1) the probability of a business being Latino-owned as opposed to a business being Asian-owned, Black-owned, or White-owned; (2) the probability of new business entry and exit; and (3) LOB employment growth. This paper then compares these factors associated with LOB with past findings on businesses that are Asian-owned, Black-owned, and White-owned. Some notable findings include: (1) only Black business owners are less associated with using personal savings as start-up capital than Latinos; (2) the only significant coefficient on start-up capital source is personal savings and it increases the odds of survival of a Latino business by 4%; (3) on average, having Puerto Rican ancestry decreases the odds of business survival; and (4) LOB are relatively likely to start a business with a small amount of capital, which, in turn, limits their future growth.View Full Paper PDF
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Working PaperCOMMUNITY DETERMINANTS OF IMMIGRANT SELF-EMPLOYMENT: HUMAN CAPITAL SPILLOVERS AND ETHNIC ENCLAVES
April 2013
Working Paper Number:
CES-13-21
I find evidence that human capital spillovers have positive effects on the proclivity of low human capital immigrants to self-employ. Human capital spillovers within an ethnic community can increase the self-employment propensity of its members by decreasing the costs associated with starting and running a business (especially, transaction costs and information costs). Immigrants who do not speak English and those with little formal education are more likely to be self-employed if they reside in an ethnic community boasting higher human capital. On the other hand, the educational attainment of co-ethnics does not appear to affect the self-employment choices of immigrants with a post-secondary education to become self-employed. Further analysis suggests that immigrants in communities with more human capital choose industries that are more capital-intensive. Overall, the results suggest that the communities in which immigrants reside influences their self-employment decisions. For low-skilled immigrants who face high costs to learning English and/or acquiring more education, these human capital spillovers may serve as an alternative resource of information and labor mobility.View Full Paper PDF
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Working PaperDeterminants of Business Success: An Examination of Asian-Owned Businesses in the United States
December 2006
Working Paper Number:
CES-06-32
Using confidential and restricted-access microdata from the U.S. Census Bureau, we find that Asian-owned businesses are 16.9 percent less likely to close, 20.6 percent more likely to have profits of at least $10,000, and 27.2 percent more likely to hire employees than whiteowned businesses in the United States. Asian firms also have mean annual sales that are roughly 60 percent higher than the mean sales of white firms. Using regression estimates and a special non-linear decomposition technique, we explore the role that class resources, such as financial capital and human capital, play in contributing to the relative success of Asian businesses. We find that Asian-owned businesses are more successful than white-owned businesses for two main reasons . Asian owners have high levels of human capital and their businesses have substantial startup capital. Startup capital and education alone explain from 65 percent to the entire gap in business outcomes between Asians and whites. Using the detailed information on both the owner and the firm available in the CBO, we estimate the explanatory power of several additional factors.View Full Paper PDF
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Working PaperExiting Self-Employment: An Analysis of Asian Immigrant-Owned Small Businesses
November 1998
Working Paper Number:
CES-98-13
Part of the uniqueness of the immigrant Asian business community in the U.S. lies in the fact that many among the highly educated pursue self-employment in small-scale, low-yielding retail and personal service fields. This study analyzes owner departure for a nationwide sample of small businesses owned by Asian Indian and Filipino immigrants and a comparison group of Asian nonimmigrant firm owners. Controlling for firm and owner traits, highly educated Asian immigrant owners are more likely than others to exit self-employment over the 1987-1991 period; exit from traditional fields (retail and personal services) is pronounced. These exit patterns do not typify the comparison group. Findings are consistent with the hypothesis that self-employment is often a form of underemployment among Asian immigrants.View Full Paper PDF
