On Immigration and Native Entrepreneurship
35 Pages Posted: 16 Mar 2021 Last revised: 31 Mar 2021
There are 2 versions of this paper
On Immigration and Native Entrepreneurship
Date Written: March 2021
Abstract
We present a novel theory that immigrants facilitate innovation and entrepreneurship by being willing and able to invest in new skills. Immigrants whose human capital is not immediately transferable to the host country face lower opportunity costs of investing in new skills or methods and will be more flexible in their human capital investments than observationally equivalent natives. Areas with large numbers of immigrants may therefore lead to more entrepreneurship and innovation, even among natives. We provide empirical evidence from the United States that is consistent with the theory's predictions.
JEL Classification: J15, J24, J39, J61, L26
Suggested Citation: Suggested Citation