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The financing of immigrant-owned firms in Canada

Author

Listed:
  • Yuri Ostrovsky

    (Statistics Canada)

  • Garnett Picot

    (Immigration, Refugees and Citizenship Canada)

  • Danny Leung

    (Statistics Canada)

Abstract

Using recent survey data, this paper examines access to financing by immigrant business owners. We hypothesize that immigrant and Canadian-born owners finance their businesses in significantly different ways and that immigrant-owned small and medium enterprises (SMEs) have more difficulty accessing financial capital. The results suggest that, after adjusting for firm and owner characteristics, financing sources for growth financing tend to be similar for the two groups. Although immigrant owners—notably those in Canada for more than 20 years—were less likely than Canadian-born owners to seek financing from any source, their applications were as likely to be approved. Both immigrant and Canadian-born owners reported that, among seven potential obstacles to firm growth presented in the survey, “access to financing” was the least important. The study finds only weak evidence to support the hypothesis that access to financial capital is a more serious issue among immigrant-owned SMEs than among SMEs with Canadian-born owners.

Suggested Citation

  • Yuri Ostrovsky & Garnett Picot & Danny Leung, 2019. "The financing of immigrant-owned firms in Canada," Small Business Economics, Springer, vol. 52(1), pages 303-317, January.
    • Handle: RePEc:kap:sbusec:v:52:y:2019:i:1:d:10.1007_s11187-018-0020-x
    DOI: 10.1007/s11187-018-0020-x
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    Cited by:

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    2. Yuri Ostrovsky & Garnett Picot, 2021. "Innovation in immigrant-owned firms," Small Business Economics, Springer, vol. 57(4), pages 1857-1874, December.

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    More about this item

    Keywords

    Business ownership; Immigrant entrepreneurs; Business financing; Financial capital;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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