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Immigration and Entrepreneurship: The Role of Enclaves

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  • Astrid Marinoni

    (Department of Strategy and Innovation, Scheller College of Business, Georgia Institute of Technology, Atlanta, Georgia 30308)

Abstract

Immigration has proven to be a major force driving entrepreneurial dynamics. In this paper I investigate how the geographical distribution of immigrants within a given country, and in particular the presence of “enclaves,” affects the relationship between immigration and entrepreneurship. I examine the impact of Polish immigration to Great Britain following the unprecedented migration wave caused by the European Union enlargement in 2004. I address omitted variable concerns by using information on the location of historical Polish military settlements and the occupational composition and growth of Polish immigration in Ireland to construct instruments for enclaves and location choices of immigrants. The econometric results indicate, on the one hand, that immigration does increase immigrant entrepreneurship, but not in existing immigrant enclaves. On the other hand, immigrant entrepreneurs outside enclaves tend to achieve worse growth outcomes than those in enclaves. Further analyses provide an explanation to these findings due to blocked labor markets and to the higher prevalence of “necessity entrepreneurship” outside of enclaves. These results offer new insights to understand the influence of geography on entrepreneurship in the presence of immigration.

Suggested Citation

  • Astrid Marinoni, 2023. "Immigration and Entrepreneurship: The Role of Enclaves," Management Science, INFORMS, vol. 69(12), pages 7266-7284, December.
    • Handle: RePEc:inm:ormnsc:v:69:y:2023:i:12:p:7266-7284
    DOI: 10.1287/mnsc.2023.4776
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