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The Impact Of Immigrant Entrepreneurship On Regional Development In Western Sweden

Author

Listed:
  • Daniel Rauhut

    (University of Eastern Finland, Karelian Institute)

  • Olga Rauhut Kompaniets

    (Dalarna University, Borlänge, Sweden)

Abstract

This paper discusses how immigrant entrepreneurship impacts regional development. Three towns in Western Sweden are analysed, using unique data on company start-ups at a local level. The findings suggest that immigrant entrepreneurs are overrepresented in the start-ups of labour intensive and low productive businesses in the service sector. Such entrepreneurship does not promote regional development, but it may get the entrepreneur out of the reliance on welfare schemes and meet their bills. Resultantly, the region appears to be caught in a vicious circle of underdevelopment, wherein companies started by immigrant entrepreneurs experience a limited market expansion, and this leads to low savings, low consumption, reduced stock of capital in the economy, and low income.This paper offers important insights on how theory and results that stem from an aggregate national level may differ when entrepreneurship is analysed at a local level. It concludes that what works well and promotes regional development in metropolitan areas may lead to completely different outcomes in smaller towns in decaying industrial regions.

Suggested Citation

  • Daniel Rauhut & Olga Rauhut Kompaniets, 2018. "The Impact Of Immigrant Entrepreneurship On Regional Development In Western Sweden," Romanian Journal of Regional Science, Romanian Regional Science Association, vol. 12(1), pages 18-42, June.
    • Handle: RePEc:rrs:journl:v:12:y:2018:i:1:p:18-42
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    References listed on IDEAS

    as
    1. Martin Andersson & Sierdjan Koster, 2011. "Sources of persistence in regional start-up rates--evidence from Sweden," Journal of Economic Geography, Oxford University Press, vol. 11(1), pages 179-201, January.
    2. Pascal Beckers & Boris F. Blumberg, 2013. "Immigrant entrepreneurship on the move: a longitudinal analysis of first- and second-generation immigrant entrepreneurship in the Netherlands," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 25(7-8), pages 654-691, September.
    3. Hou, Feng & Lu, Yuqian & Abada, Teresa, 2012. "Choice or Necessity: Do Immigrants and Their Children Choose Self-employment for the Same Reasons?," Analytical Studies Branch Research Paper Series 2012342e, Statistics Canada, Analytical Studies Branch.
    4. Baycan, Tüzýn, 2013. "Turkish Entrepreneurship in Europe," European Review, Cambridge University Press, vol. 21(3), pages 382-393, July.
    5. Oded Stark, 1991. "The Migration of Labor," Blackwell Books, Wiley Blackwell, number 1557860300, June.
    6. Andrew Arbuthnott & Yvonne von Friedrichs, 2013. "Entrepreneurial renewal in a peripheral region: the case of a winter automotive-testing cluster in Sweden," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 25(5-6), pages 371-403, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    entrepreneurship; immigrants; unemployment; labour market; regional development;
    All these keywords.

    JEL classification:

    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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